If it seems to you like the intensity and cost of natural disasters are on the rise, you may be on to something. In fact, the Insurance Bureau of Canada (IBC), notes that extreme weather conditions routinely exceed $2 billion annually, with most of it due to water-related damage.
Over the past decade, rising sea levels, extreme rainfall and storms, and rapidly melting snow due to climate change have increased the likelihood of flooding across Canada.
And this can have a significant impact on your home insurance.
Is your insurance up to the task?
You may be surprised to learn that your home insurance policy probably doesn’t cover flooding. That’s because basic policies only pay to repair the damage caused by water — but only when the water doesn’t come from an outside source.
Confused? Here’s how your insurance provider looks at it.
If a storm or falling tree limb damages your roof, your insurance will cover the costs to repair the roof. If rainwater manages to seep its way into your home before the repairs are completed, your insurance will also take care of the water-related damage.
However, water from floods or a backed-up sewer is considered to originate from an outside source and is not included in a standard home insurance policy.
This distinction between the source of the water damage is important. Unless you add specific flood insurance to your existing policy, you may, in a manner of speaking, be left high and dry by your insurance company.
That’s why it’s also essential to document the value of the contents in your home. Contents coverage is included in most home insurance policies. Be sure to read your policy carefully to understand what you have coverage for and what you may need to add.
What types of flood insurance endorsements are there?
To protect your home from flood water damage, you should consider adding overland flood insurance to your policy. It covers damage from surface water, including overflowing waterways and water pooling on the ground that can seep into your basement through even a tiny crack in your home’s foundation.
This form of insurance was introduced in 2014. If you live in an area prone to flooding and decide to opt for the overland flood insurance, you’ll be considered a higher risk. This may add to the cost of your premium.
If you live in an area considered to be part of a floodplain, you may even be denied coverage.
Also, keep in mind that heavy rainfall can overwhelm municipal storm drains forcing wastewater back through drain lines. Unless you have added a sewer backup endorsement to your policy, you won’t be covered if this mess ends up in your basement.
More help may be on the way: The federal government has recently committed $3.17 million to a national flood insurance program to offset the costs of severe weather. As a starting point, the program is meant to help people living in flood-prone areas and who cannot otherwise afford flood insurance.
What is the best way to flood-proof your home?
There are many things you can do to keep your home from flooding. One of the most obvious is to avoid building in flood-prone areas in the first place. But with rising water levels, we now need to think about “climate-proofing” our homes.
Here are some other ways to reduce the potential for flood damage to your home:
- Install a backwater valve. If you don’t already have one, consider installing a backflow valve in your sewer line. That will prevent waste from coming into your home through your basement floor drain.
Depending on how much work is required, the cost to install a backflow valve could run you several thousand dollars. But when you consider that the average cost to repair a flooded basement is about $43,000, this is money well spent.
A backflow valve can also help reduce your insurance premium.
- Maintain eavestroughs and gutters. Make sure your gutters are free from obstruction and that downspouts direct the runoff at least five feet from your home’s foundation.
- Ensure the ground slopes away from the foundation. This will prevent water from pooling around your foundation and eventually finding its way into your home.
Before obtaining insurance, it’s best to shop around to find the coverage you need at the lowest price, by comparing rates and policies from multiple insurance providers.
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