Floods are the second most common natural disaster in Canada, occurring five times as often as wildfires. Just a few centimetres of water from flooding can cause costly, irreversible damage to your home.
When it comes to protecting homes from floods, most property owners assume their home insurance policies will provide adequate coverage. This is often not the case, making dedicated protection in the form of overland flood insurance a must.
Overland flooding is defined as floodwaters that flow from an outside source or body of water onto dry land, causing water damage. The two most likely causes of overland flooding include snowmelt and rainstorms. Overland flood insurance covers flooding from surface water accumulation as well as from bodies of water, such as lakes, rivers or streams.
Understanding what is and what is not considered flooding from an insurance perspective is critical to ensuring you secure the appropriate policies to protect against water damage.
While traditional home insurance policies and tenant policies may offer coverage for water damage from sewer backups or pipe bursts, they commonly exclude losses caused by overland floods.
While newer policies can include some level of flood protection, availability varies. What’s more, even comprehensive homeowners and tenant insurance policies (which often offer the best available protection for homeowners and tenants) don’t automatically provide broad protections for water damage.
Some wrongly assume that sewer backup insurance provides adequate coverage. However, these policies only insure you from non-storm-related backflow from sewers or septic tanks. Sewer backup insurance doesn’t protect you if the backflow results from a sudden flow of external groundwater.
To truly protect your home from floods, you can’t rely on standard home insurance policies or tenant insurance alone. Instead, you should turn to new forms of protection, like overland water endorsements.
Standard home, condo (strata) and tenant policies often exclude overland flood damage coverage. However, because extreme weather events are becoming more frequent, many insurers are now providing policyholders with the option to purchase add-ons (endorsements).
In general, overland flood endorsements provide a level of flood insurance that was previously unavailable. Specifically, the overland flood endorsement can protect against damage resulting from melting snow, excess rain and overflowing riverbeds.
With overland flood insurance, it is important to understand what is and what is not covered. Overland flood insurance covers damage from freshwater sources. This means that any claims related to costal flooding, tsunamis and other saltwater sources are excluded. Dam breaks are also specifically designated as uncovered occurrences.
Overland water endorsements are available to most property owners across Canada. However, a small number of dwellings may not qualify if the risk of flooding is too high in their area. The best way to determine your coverage eligibility is to contact Lawrie Insurance Group today and learn all about your options.