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Many homeowners, unfortunately, discover that their claims for coverage following a flood in their homes are denied, as their standard home insurance policy does not cover damage caused by water from an outside source, like a rainstorm.
Unless the flooding caused in your home was the result of a burst pipe, broken-down appliance, or other sources from within your home, a standard policy will not offer coverage for this particular type of damage.
Homeowners need to understand that when they take out a home insurance policy, they may not be covered for specific types of water damage. Adding flood insurance is optional, but its lack of inclusion in a typical policy is something that homeowners should be aware of.
The question is, should you add coverage for flood damage to your home insurance policy?
What Is Flood Insurance?
Flood insurance protects your home from damage caused by the accumulation of water in the event of a torrential downpour, an overflowing river, ice and snow runoff, landslides, and other outside sources of water.
Interestingly, flood insurance has only been around for a few years. Before 2015, only sewer back-up cover was available from insurance providers. Now, there are plenty of options when it comes to flood insurance, depending on where you live and your insurance provider.
This type of insurance is optional, so you would have to add it to your current home insurance policy for an extra fee.
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Does My Regular Home Insurance Cover Any Water Damage?
According to the Insurance Bureau of Canada, a standard home insurance policy covers certain types of damage caused by water. However, the water must have originated from within your home and must not have come from the ground or from outside your home. That means any water that made its way into your home from a big rainfall or the sewer backing up will not be covered.
That said, damage caused by water from any of the following is covered:
- Burst pipes
- HVAC systems
- Leaky roof (roof damage is not covered if it’s the result of wear and tear or lack of maintenance)
- Broken water main
- Malfunctioning appliances
If you want additional coverage for damage caused by other water sources, you’ll need to add additional coverage in the form of flood insurance.
Also, it should be noted that damage caused by frozen pipes will not be covered. If you’re away from home during the colder months of the year, your insurance provider may require that you drain the plumbing or shut the water valve off before leaving for an extended period of time. Or, you might want to have someone you know check on your home every day while you’re away to make sure that the heat is still running.
That said, if your pipes freeze anyway even after taking the necessary steps to protect your home, the damage should be covered by your home insurance policy.
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What Is Covered Under Flood Insurance?
A flood insurance policy covers overland flooding caused by an overflowing of a body of water — such as lakes or rivers — onto dry land, leading to water making its way into your home.
Coverage for tidal flooding caused by a body of saltwater making its way onto dry land and into your home is usually not offered by most insurance providers in Canada. That’s because the odds of this type of flooding are so low. Since only a small portion of homeowners who own coastal properties are exposed to this risk, other policyholders shouldn’t have to share in the cost of this type of coverage through their premiums.
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What Isn’t Covered Under Flood Insurance?
Flood insurance does not cover damage caused by flooding from the following:
- Tidal waves and tsunamis
- Rising water tables
- Storm surges
- Sewer back-ups
Sewer Backup Insurance
Sewer back-up can result in sewage or freshwater entering your home through drains, pipes, septic tanks, eavestroughs, or downspouts. Most often, sewer back-up occurs after a heavy rainfall or the rapid melting of a lot of snow that overloads the city sewer system.
If you live in an older area with combined storm and sanitary sewers and the land is low-lying, a sewer back-up policy may be something worth considering. You’ll only be covered for water damage in your home as a result of a sewer back-up if you buy a specific sewer backup endorsement. This add-on can be purchased on top of your existing home insurance policy.
In some cases, this coverage may not be available if the risk of sewer back-up is very high. And if it is, the cost will vary depending on where your home is located and whether or not you’ve made any claims for sewer back-up damage in the past.
If your home is at risk for sewer back-up, you may want to install a backflow prevention device in your home if local codes in your jurisdiction allow it. Some insurance providers may even offer a financial incentive to install these devices.
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Should You Get Flood Insurance?
Your decision to buy flood or sewer back-up insurance will depend on your risk and concern levels. If you live in an area that’s notorious for lots of precipitation and the financial repercussions to repair water damage would overwhelm your budget, then a flood insurance endorsement might be worth paying a little extra for.
And if your home’s sewer system is shared between sanitary and storm sewers, then a sewer back-up rider might be worth looking into as well. If the cost of a flood insurance policy with current home insurance is very high, compare quotes online to see where you can find a lower price somewhere else.
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