High seasonal risk for overland water damage is upon us
The spring thaw typically brings with it a heightened risk for overland water damage. Since early 2016, various insurers began offering this type of coverage to private property owners and renters in Canada largely in thanks to the availability of updated flood plain maps and a clear trend towards more frequent fresh water flooding events.
Although consumers may view water damage as one type of risk, insurers in Canada generally offer three different categories of coverage including:
- Basic Coverage – Generally offers protection for losses resulting from unforeseen events inside the home such as burst water pipes, overflowing bathtubs, and broken/leaky aquariums. Basic water coverage is usually included in your home insurance policy although it is important to note that coverage for burst water pipes may depend on your home being monitored regularly or the water shut-off and pipes drained if you are away for more than four consecutive days.
- Sewer Back-up and Sump Pump Coverage – Generally offers protection for losses resulting from back-up of water or sewage from sewers or drains leading to sewers. The coverage restriction here is that water must not enter the property from an overland source. This coverage is usually available to existing property policyholders for an additional premium.
- Overland Water Coverage – Generally offers protection for loss or damage related to water entering a property from the sudden accumulation of water from heavy rains, spring run-off, or overflow from lakes or rivers, and is widely available for almost all homeowners, condominium owners, and tenants. Rates for this coverage will vary according to the risk profile of individual properties, but insurance for many homes can probably be considered affordable. The exception to this would be if you reside in a known flood plain and insurance rates would correspondingly be higher.
Having distinct coverage offerings for water damage available from insurers means that property owners need to assess their personal risks and purchase the individual coverages that they want to be insured for in the event of a loss.