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Overland water is a phrase used in the insurance industry to describe when water seeps into your home after overflowing from a nearby waterway.
Sewer back-up is also a commonly referred to insurance term. It describes when water enters your home after overflowing from a toilet or drain.
Flood coverage is usually named as an exclusion on home insurance policies. To be protected against it, homeowners must add coverage.
The Insurance Bureau of Canada estimates that most Canadians can purchase overland water coverage for about $10-30 per month, provided the home is not located on a flood plain.
If it’s in an area where residents have a history of filing flood claims, expect to pay more. The premium could jump to $50-100 per month, the IBC says.
Regardless of what policy type you have, flood protection must be an add on. There’s no scenario in which you will have purchased a home insurance policy in Canada that comes with flood protection.
We strongly encourage all homeowners in Canada to seriously consider getting overland water coverage for two reasons.
First, most home insurance policies do not include flood protection; it is named as an exclusion. (In the insurance industry an exclusion refers to a restriction to home insurance coverage by certain causes of loss.)
This means that regardless of what type of home insurance policy you have, for your home to be protected against flooding, you must add protection to your policy. For this reason, you may find overland water coverage described as an ‘add on’.
The second reason that we recommend overland water coverage is that homes across Canada are increasingly being damaged by incidents of severe weather, including flooding.
The Insurance Bureau of Canada reports that in 2021, Canadians filed claims totaling more than $2 billion in insured damage following severe weather events across the country. This figure would have included a significant volume of overland water claims such as those stemming from the historic floods that damaged Abbotsford, B.C. in the same year.
While previously you might have assumed your home was unlikely to be damaged by flood and you could do without overland water coverage, we recommend you consider adding it to your policy.
Some insurance providers offer water protection packages that include standard water damage protection (for example, if a pipe bursts) as well as overland water protection and sewer back-up protection.
An overland water endorsement refers to when you add coverage to a home insurance policy to protect against damage from overland flooding.
In the insurance industry, the term ‘endorsement’ refers to an amendment to an insurance contract that alters its provisions.
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.
In general, overland water coverage refers to protection against water that overflows from a nearby waterway such as a river or lake. Flood coverage on the other hand refers to water damage from an overland body of salt water. Flooding is considered to take place via a tsunami, tidal wave or overwhelming current.
Insurance companies distinguish between different types of flooding. In some instances, their water protection packages will include protection against different types of flooding – most commonly water damage, overland water and sewer back-up.
In other instances, the policyholder will have to add specific flood coverage to their policies. For example, they may have to add overland water coverage as well as sewer back-up coverage.
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.
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