Get the Cheapest Overland Water Coverage in Canada

No. Home insurance is not required by law in Canada. Among those homes that are insured, the government doesn’t require homeowners to add overland water coverage to their insurance policies.

However, many homeowners have home insurance because most lenders require coverage before they’ll offer a mortgage. Depending on the location of the home you’re mortgaging, a lender may require that your home insurance policy also include overland water protection.
 

Overland water coverage and flood coverage are often used interchangeably.

However, overland water is not the only coverage to protect your home from a flood and should not be confused with ‘water damage.’ The latter is standard coverage that’s included in most, if not all, home insurance policies. It protects your home from sudden or unexpected leaks produced by a fixture, appliance or plumbing within the bounds of your property.

Overland water damage, on the other hand, is usually purchased as an add-on – meaning it’s not included in most standard home insurance policies. The coverage protects your home from damage caused by fresh water that flows above ground. Examples include:

• The overflow of any body of fresh water, such as a lake, pond, stream or river.
• Heavy precipitation, such as rain or melting snow or ice.

It's worth pointing out that for your overland water claim to be accepted, the water must have entered your home through the windows, doors or wall cracks at the foundational level. Overland water will not cover damage caused by seepage through the roof or upper windows. It also won’t come into effect if the water gets into your home through an open door or window.

Tidal or coastal flooding – which is caused by abnormally high sea water levels – is also not covered by overland water. In fact, there is no tidal flooding coverage in Canada.

Water damage caused by sewage water that enters your home through toilets or drains due to a backed-up sewage system in your area does not fall under overland water either. For that you’d need to purchase a separate add-on, known as ‘sewer back-up.’

We recommend that you consider purchasing overland water and sewer back-up protection, regardless of whether you live in a home or a condominium or high-rise building.

Your home insurance policy is likely to protect against water damage, such as that from a burst pipe, but, will not include protection against flooding. For that you will need to add flood protection to your policy.

While condo buildings have their own insurance policies, it is unlikely to cover damage to your individual unit. Shared common spaces will be covered, but damage to your home and its contents will only be covered by your own policy.

An additional benefit of condo dwellers having overland and sewer back-up coverages is that they serve as protection for any damage to the contents of underground storage lockers such they be damaged by a flood.

Overland water coverage could cost you $15 to $35 per month – or $180 to $420 per year – depending on how much of a risk overland flooding poses to your area. If you live in a low-risk area, your overland water coverage could be free – though the likelihood of that is low.

When it comes to insurance claims, it’s best to file them as soon as you can. However, given that overland floods may require you to leave your home – either due to an evacuation order or your own choice – filing a claim right away may not be feasible.

That said, you should still strive to file a claim sooner rather than later. Here are the steps:

Step 1: Take stock of all your damaged or lost items

Make a detailed list of everything that got damaged, destroyed or lost, including parts of the property itself (e.g., walls, doors and fixtures) as well as personal possessions such as furniture, electronics and clothing.

Take photos of the damaged items and try to find photos of the items that got lost. If you can attach proof of purchase, receipt, warranty or a similar piece of documentation to every lost or damaged item, do so.

Also, do not discard any of the damaged or destroyed items unless they pose a risk to your health.

In general, it’s always a good idea to have a detailed inventory of all your items ahead of time, so if you have a moment, consider putting one together as soon as possible.

Step 2: Get in touch with your insurance provider

With a list of all your damaged, destroyed or lost items in hand, go ahead and report the incident to your insurance provider. Most companies have 24-hour claims services, so you can do this at any time (our recommendation is to report all insurance-related incidents as soon as you can).

Be sure to convey as much information about your situation as possible, including the extent of the damage to your property.

If the damage is so extensive that you can’t even live on your property, be sure to ask about the Additional Living Expenses (ALE) coverage, which would provide you with funding for temporary accommodations, including costs like your hotel room, groceries and extended travel.

For ALE to apply, keep all your receipts, so you can get those costs reimbursed.

Once your claim is filed, the insurance company will assign a claims adjuster to your case, who will conduct a detailed investigation of what happened and determine the appropriate coverage amount.

Step 3: Complete a proof of loss form

Your insurer will ask you to sign a proof of loss form, which would list all your damaged, destroyed or lost property alongside the cost of their replacement or repairs. Make sure the document reflects the reality of what has occurred. Otherwise, your insurance claim could become void.

If you have a standard home insurance policy, then it probably does not include overland water coverage. ‘Overland water’ refers to damage caused by bodies of water like lakes, rivers, streams or ponds when they overflow onto dry land, resulting in flooding. The coverage also protects homes from damage due to excessive rainwater or thawing snow, which sometimes seeps through basement windows, doors or wall cracks.

If you want this coverage, you’ll need to purchase it separately, as an add-on.

Note that your policy probably includes coverage called ‘water damage.’ This is not the same as ‘overland water.’ Water damage refers to sudden damage caused by faulty plumbing, appliances or fixtures that are located on your property (e.g., your dishwasher).

Yes, overland water coverage can have its own deductible that is separate from your overall home insurance deductible. In fact, deductibles for overland water can be as high as $20,000. For contrast, regular home insurance deductibles are around $1,000.

This varies by insurer, however. In some cases, your overland flooding coverage may share a deductible with the rest of your policy.

Carefully review your insurance agreement, and if you’re still confused, contact your insurance representative so they can explain how your deductibles work.

Do note that the higher the deductible, the more you have to pay out of pocket. In some cases, a deductible may be so high that you may receive zero coverage. For example, if your overland water deductible is $20,000 and the cost of damage is $10,000, then your claim would be rejected – since you’d be expected to cover any damage costs (related to overland flooding, specifically) up to the amount of $20,000. If in this same scenario, your damage cost is $22,000, then your insurer would cover $2,000, leaving the rest to you.

If you live in an area where overland floods are frequent and cause extensive property damage, your insurer may not offer you overland water coverage due to the risk being too high.

If that’s the case, you may want to explore various disaster assistance programs offered by the Government of Canada, including the Disaster Recovery Assistance for Ontarians (DROA).

Yes, overland water coverage is an add-on, which means that most home insurance policies do not include it by default. If you’ve purchased home insurance without looking too deeply into your water damage coverage options, it’s likely that overland water is excluded from your policy.

To confirm what you have or don’t have, be sure to chat with your insurance provider – they’ll explain everything.