What home insurance coverage do I need for water damage?

With the recent floods in northern Ontario, Quebec and around the world, do you know what your home insurance policy covers? Find out more in this article and get tips to help you bounce back after a water-related event. 

Water Damage a Growing Threat to Homeowners

Did you know that claims from water-related events make up 48% of all insurance claims in Canada? Water claims far surpass fire or theft claims made on home policies. Most home policies include basic water coverage. However, it is important to review these details with your broker and gain a full understanding of the unique water exposures that you may face.

Each home or property experiences water differently – do you live close to a river, at the bottom on a hill, in a flood plain, in an older apartment building or close to major traffic? How about the age of your home – is it built with the most up-to-date plumbing or pipes or does it need an upgrade? Could you be affected by water from another unit in your building or on your block? Can your roof or foundation withstand a significant flash flood? Do you have the proper sump pump size for your surroundings?

As you can see, there are a lot of important questions to ask when finding the right insurance coverage for your home. In order to help make those decisions a little easier, here are a few of the common water coverage options and some tips for making sure that you have the coverage that is right for you!

The Basic Policy

Typically in Ontario, basic water coverage that is built into your home policy will cover events that we call “discharge and overflow” scenarios. To put this simply, these are scenarios where vessels in your home that are normally supposed to hold water do not perform as expected.

For example, a pipe bursts and releases water into your kitchen or your washing machine suddenly starts washing the laundry room floor instead of your clothes. The basic policy will usually cover the sudden and accidental escaping of water from a plumbing source. This is important! If you experience a water issue that is ongoing or continual, this will not be covered under your standard property policy.

Sewer Back-up Coverage

You’ve probably already heard of sewer back-up coverage since it is a very common addition to a property policy! Sewer back-up covers damage caused by the back-up of sewers, septic tanks downspouts, and eaves troughs.

No one, and we mean no one, wants a backed up septic tank or sump pump. This is what we refer to as “brown water”, for obvious reasons. As sump pumps are located in the basement, it is extremely important that you update your insurance policy if you finish, or complete renovations to your basement living area. Updating your policy can ensure that if you do have a back-up event, you can be properly compensated for the damages.

Insurance companies tend to offer discounts to households that have taken preventative measures such as the installation of gate, flapper, or balloon style sewer backwater valves or alarmed sump pump and pits, and back-up power systems.

Overland Water Coverage

Overland Water covers damage caused by freshwater floods (like overflow from lakes, rivers or streams), spring thaw (snow and frozen grounds), snow melt runoff and heavy rains. Furthermore, gutters and drains can overflow due to the causes just mentioned, resulting in water entering the home through the foundation, underground level doors or any other entry point. In Southwestern Ontario, we are prone to quick freeze-thaw cycles, and many of our homes and cottages are located close to scenic bodies of water.

“Overland Water” damage can be caused by freshwater floods, like overflow from lakes, rivers or streams, spring thaw (snow and frozen grounds), snow melt runoff and heavy rains. Furthermore, gutters and drains can overflow due to the causes just mentioned, resulting in water entering the home through the foundation, underground level doors and any other entry point. In Southwestern Ontario, we are prone to quick freeze-thaw cycles, and many of our homes and cottages are located close to scenic bodies of water.

Ever wondered what happens if someone above you has a flood and water, inevitably, moves downward into your unit? Since Overland Water coverage protects against more than just a freshwater flood from a body of water, it is still an important coverage for those who live on higher floors of a condo or apartment building. Whether water from a unit above damages your personal property, or your building is damaged by overland water and you need to be evacuated, Overland Water coverage can protect you from additional living expenses of being relocated or replacing your damaged belongings.

Exclusions

Unfortunately, not all properties and locations will be eligible for all water coverages. Since insurance prices are determined by understanding your neighborhood’s risk factor (you can read more here), exclusions are determined based on past water-related claims. Typically, properties within 100 meters of a river or other flowing body of water do not qualify. Waterfront lake properties may qualify provided they meet some special requirements.

How to Ensure You Have Proper Coverage

• Review your current policy to ensure immediate coverage
• Let your broker know when renovations or upgrades are completed on you property. (You may even be eligible for discounts!)
• Install a backwater valve, sump pump back-up or an alarmed sump pump
• Perform preventative home upgrades, such as extended downspouts, corrective grading  or above ground window well installation and let your broker know
• Create a log of your property contents and update it each year when your insurance policy is up for renewal
• Discuss your insurance limits. Is your coverage enough for your needs? Do you want to reduce your deductible?

Your property insurance should include coverage for any sudden or accidental discharge of water in your home. However, you have many options available to you to ensure that you are properly protected from a broad spectrum of water-related events. We recommend having a conversation with your broker after reviewing and comparing your current coverage and unique needs.

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