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Flood Insurance in Canada

Your guide to understanding overland flood insurance and coverage in Canada

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About flood insurance in Canada

According to the Insurance Bureau of Canada, the Toronto flash floods of 2013 constituted the most expensive natural disaster of all time in Ontario, costing the province almost $1 billion in insured losses. More recently, the city's 2018 rainstorms caused extensive flooding resulting in over $80 million in insured damage. With climate change on the rise, natural disasters like this are becoming more commonplace.

Despite the fact that flooding is by far the most frequent kind of natural disaster in the country, insurers only started offering flood insurance coverage in 2015. Before then, only sewer system back-up coverage was offered, but now Canadians have several options, depending on where you live. All flood insurance is optional, and if your insurer offers coverage it is purchased as an add-on to your home insurance policy.

This guide aims to answer all your flood insurance questions.

What is the difference between water damage, flood damage, and overland flood damage?

The difference is where the water comes from.

  • Water damage – Comes from inside the home. If a pipe in your home bursts, for example, this is considered water damage and is covered by most home insurance policies.
  • Sewer system back up water damage – Results from the back-up of freshwater or sewage from a septic system or sump pump.
  • Tidal flooding – This is when your home gets flooded by a body of saltwater, such as a tidal wave or a tsunami. Most Canadian companies do not provide coverage against tidal flooding.
  • Overland flooding - Damage resulting from bodies of water such as lakes, rivers or oceans overflowing onto dry land, due to a natural disaster, or even a simple spring thaw, that seeps in and floods your home.
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What are the different kinds of water damage covered by my standard home insurance policy?

These damages are covered by your base home insurance policy covers:

  • Appliance or fixture malfunctions – Like a washing machine, dishwasher, or a toilet overflow on your property. The repairs to the appliances and the damage would be covered if it was sudden or accidental.
  • Burst pipes – Flooding due to a faulty sprinkler/indoor plumbing, air conditioning/heating system ruptures, or a broken water main are all typically covered, as long as the damage is not a result of poor maintenance (e.g.: frozen pipes).
  • Roof leaks – Leaks on the roof due to causes other than wear and tear will be covered. It is always wise to consult with your insurance provider to better understand the specifics.
  • Ice damming – is a ridge of ice that forms at the edge of a roof and prevents melting snow and ice from draining off. This is covered under most basic home insurance policies.
  • Sewer back-up damage – Water damage resulting from the back-up of freshwater or sewage from a septic system is not covered under a standard home insurance policy and must be purchased as an add-on. You may want to install sewer backwater valves and sump pumps, as this could fetch you discounts with some insurance providers. Damage caused by sump pump failure will not be covered under standard home insurance, so you would need to purchase sewer back up coverage to be insured.

What is covered and not covered in flood insurance?

Your guide to coverages and exclusions under flood insurance:

Type of damage Covered? Type of Coverage Exclusions
Sudden bursting of pipes; Plumbing; Water main breaks; Freezing of indoor plumbing; Overflowing or leaking appliances Yes Standard home insurance Frozen pipes in a vacant home left uninsulated; Flooding due to poor insulation; Wear and tear; Rust, or corrosion; Slow deterioration
Overland flood damage caused by a large body of freshwater that flows over dry land (caused by snow melts, rainfall, etc.) and then enters your home through doors, windows or cracks Yes Overland water insurance (add-on) Overland flood damage due to a dam disaster, or saltwater flooding due to tidal flooding; Earthquakes, landslides, or tsunamis; Damage caused by rising groundwater
Flood damage if you live in a known, high-risk flood plain May not be covered Check with your provider Home located within 100 metres of flowing water
Damage or flooding caused by wastewater that backs up through sewers or municipal septic systems Yes Sewer back-up coverage (add-on) Sewer back-ups caused by exterior drains at the bottom of your window wells, sump pump power failure
Freshwater flooding in your toilets, basement, or drains due to a storm sewer back-up Yes Sewer back-up coverage (add-on) Depending on your provider, sewer back-ups caused by exterior drains at the bottom of your window wells and sump pump power failure may not be covered.
Damage to vehicles due to flooding and rising water by rain, hailstorms, thunderstorms and lightning; Sewer line back-up Yes; under auto insurance Comprehensive or ‘all perils’ coverage (under auto insurance) Water damage due to leaving a window open, or general negligence
Damage to vehicles due to falling trees, branches or other objects during a natural disaster Yes; under auto insurance Comprehensive or ‘all perils’ coverage (under auto insurance) Water damage due to leaving a window open, or general negligence

Frequently asked questions about flood insurance in Ontario

Why is there no coverage for tidal waves or tsunamis?

Since tidal waves, tsunamis, or breakage of dams are all risks that affect only a small percentage of the population living in close proximity to coastal areas and other regions, the cost of this coverage would be exponentially high against the risk.

Is water damage to my car covered under flood insurance?

Water that gets into your car during a sudden storm, overflow or flooding can cause severe damage to the vehicle’s engine. Repairs are typically covered if you have comprehensive coverage on your auto insurance policy, or if you have purchased an all-perils coverage. It is not included in your basic mandatory auto insurance coverage, so it is good to review your car insurance policy to find out what is covered. Coverage for your vehicle is not covered under home insurance flood coverage.

Can I buy flood insurance?

A comprehensive home insurance policy may or may not contain coverage for certain kinds of flood damage. It depends on the insurer. Typically, basic home insurance coverage will protect your home from some water damages. If you want to purchase additional coverage for overland flood insurance, some providers will require you to also purchase sewer back-up. Sewer back-up coverage can be purchased on its own without adding overland flood insurance.

What is the best flood insurance in Canada?

Each insurance policy is different and when it comes to flood insurance, you need a policy that is unique to your needs. This is why there is no one best type of flood insurance, as everyone’s situation is different. When you shop for your home insurance quotes online on RATESDOTCA, you will get rates from 30+ top providers, and you can talk to these providers to ensure you have all the coverage you need, come rain or hail.

Not every provider offers overland flooding insurance, and coverages vary vastly, which is why you should get quotes from multiple insurers to make sure you are getting the best rates for your needs.

Can I be denied flood insurance?

Yes, you can be denied flood insurance if you misrepresent your situation. Any damage caused by negligence or poor maintenance of your property can cause your claims to be denied. Some of these instances include:

  • Flooding due to frozen pipes that have not been insulated
  • Leaving your home vacant for a long period of time without checking in to mitigate potential damages
  • Water damage caused by a roof that requires replacing

Your insurance is there to cover you for any sudden, accidental, or unexpected water/flood damage caused by breakdowns, blockages, clogging, or natural disasters, not to make up for your negligence.

In some cases, older homes that stand in a flood plain cannot be insured because the risk of flooding and damage is exponentially high. Homeowners in such situations can still be assisted with their claims by the Disaster Financial Assistance Arrangements program funded by the federal government but distributed at a provincial government level.

I live in a condo. Do I need flood insurance?

That depends on whether or not your condo unit is at risk in the event of flooding, such as if it is on the first floor or a lower unit. Whether you rent or own, you might want to consider adding flood insurance, including sewer system backup coverage, to your policy to ensure your belongings are protected.

I rent my home. Do I need flood insurance?

If you rent an apartment in a flood plain, or a basement apartment, you may need flood insurance. Your landlord will typically have property/landlord insurance, which will insure the building and its structure, but the safety of your contents (like your furniture, electronics, clothes and other belongings inside your rental home) is on you and this is what tenant insurance is for.

A basic renters’ insurance does not automatically provide coverage against flood damage. However, you can buy this coverage as an add-on into your existing tenant insurance policy. Water damage like sudden leaks and pipe bursts will typically be covered in your standard tenant insurance.

If you feel like your home is prone to rainstorms or flood, don’t wait till the water comes up to consider flood insurance. Talk to your representative today to see if you should add this extra coverage to your insurance policy.

How can I prepare for water-related damages?

Even if you have purchased the required coverages, these tips we have gathered from the Insurance Bureau of Canada will help minimize any potential water damage:

  • Keep a regularly updated inventory of important things in your home.
  • Make sure that any important documents, irreplaceable paperwork, and photographs are stored in a space where they are less prone to damage (for example: not in your basement).
  • Install one or more sump pumps with back-up batteries.
  • If you have to be away from home for more than three days, have someone you trust to check in daily, ensuring that the plumbing is draining, and the heat is on.
  • If you’re going away for a long period of time, it is recommended you let your insurance provider know.
  • Install backflow/backwater valves or plugs for your toilets and drains to prevent sewage back-up in your home*.
  • Ensure all floor drains are clear of obstructions.
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  • Consider raising large appliances like furnaces, heaters, ad electrical panels up on wood or cement blocks.
  • Ensure there is proper grading around your lot on your property to allow water to drain away from basement walls.
  • Make sure that you extend your downspouts at least six feet, to have the rainwater drain away from your home. (keep your neighbouring houses in mind!) toward the street or a back lane.
  • Maintain your sidewalks, patios, decks and driveways, and check to make sure they aren’t allowing water to drain towards your home.
  • Prevent soil erosion by landscaping your yard and lawns with plants and vegetation.
  • Install plastic window well covers.
  • Always clear snow away from your home’s foundation.
  • Use a rain barrel to help collect roof runoff.
  • Have a disaster safety kit handy.

*Check with your municipality before installing a backflow valve; they provide subsidies on these valves which are otherwise expensive.

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Recent home insurance quotes

Use RATESDOTCA to find the best rate on property insurance. It's quick to get quotes and simple to use. Here are some examples of recent home insurance quotes published on RATESDOTCA.

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