As a homeowner (or tenant with respect to personal property) here's what you need to know about "flood insurance" – it doesn't exist. Every spring, melting snow and heavy rainfalls yield to rising waters, posing a threat to regions across the country. Yet despite this expected occurrence, overland flooding, due to overflow from a body of water, isn't covered by home insurance policies anywhere in Canada. Why isn't overland flooding covered?
The purpose of insurance is to spread risk among many policyholders. But overland flooding is a risk for only a small percentage of the population – that is, those who live in floodplains or floodprone areas close to rivers or lakes. Since most homeowners aren't exposed to this flooding risk, they shouldn't share in the cost. This means the price of flood coverage would be very high for the small number of people who might need it.
However, there are some types of water damage that are covered by home insurance policies, usually including sudden and accidental damage from:
- Broken water pipes or water mains;
- Indoor or outdoor domestic appliances on your property; and
- Sprinklers or air conditioning systems.
Uninsurable examples include:
- Damage arising from the freezing of indoor plumbing. If you're away from your home for more than four days during the normal heating season, you must drain the plumbing or have your home checked regularly to ensure that heat is maintained.
- Damage arising from freezing outside the home (for example, melting or moving snow and ice).
Sewer backup coverage may be available for purchase as an add-on to your existing home insurance policy but as with any optional coverage, it is subject to the underwriting guidelines set out by individual insurers.
How to protect yourself and your property
While flooding can happen at any time in any place, it's important to familiarize yourself with the area in which you live. If you live in a flood-prone area, contact your municipality for a floodplain map (if available) and flood reduction tips. Look over your current home insurance policy and contact your insurer with any questions you may have.
Source: IBC Insurance Bureau of Canada