Understanding what constitutes flooding from an insurance standpoint is crucial to ensure you have the right policies in place to safeguard against water damage.
Is overland water coverage necessary?
A conventional home insurance policy does not cover claims involving overland water. When you add overland water coverage to your policy, it will pay to repair damage caused by overland water to your home and contents, minus the deductible you choose (What is a deductible?). Overland water coverage may be applicable in the following situations:
Example 1: You are renting a high-rise apartment when a neighboring river floods, rendering your building impassable. Overland water insurance will ensure that you have enough money to relocate temporarily until the flood subsides and the apartment building is rebuilt.
Example 2: Water seeps in through your basement windows after many days of spring rain. Overland water insurance would cover house repairs as well as the replacement of irreversibly damaged personal belongings. This endorsement would also cover additional living expenses if your home is uninhabitable while repairs are being made.
Overland water coverage is an add-on to your homeowner’s, renter’s, or condo insurance policy. It is not, however, a stand-alone policy; it is frequently obtained in conjunction with sewer backup insurance. A BIG broker will be able to offer you a clearer sense of the coverages and eligibility that are available to you.
What is overland flooding mean?
Overland flooding is one of Canada’s most common and costly natural dangers, with water flowing overland and seeping into buildings through windows, doors, and gaps. Hundreds of thousands of Canadians have been harmed by floods, which cost millions of dollars each year.
Floods can occur in any part of Canada at any time of year, but the majority of them happen when the volume of water in a river or stream exceeds the channel’s capacity. Flooding occurs along lake and coastal shorelines when water levels rise above usual and inundate low-lying areas.
Flooding can occur when there is a lot of rain, especially in the spring when the ground is still frozen or saturated from earlier storms. Floods can be caused by rapid melting of snow and ice jams. Other causes of flashor suddenflooding, in which warning time is extremely restricted, include hurricanes and dam failure.
In Canada, overland flooding is a major concern. This is a flood that occurs when the water level outside of your home rises, causing water to enter your home. This can occur as a consequence of river levels rising due to rain or large amounts of melted snow, or as a result of dams and channels overflowing. In general, this type of flooding is not insured in Canada, and insurance providers would almost certainly deny your claim. Some government initiatives exist to assist homeowners in dealing with this type of damage, but policyholders are largely unprotected in terms of insurance.
As a result, while buying or building a home, it’s critical to think about the location carefully to avoid locations with a history of overland floods. Strong overland floods devastated large sections of Alberta (e.g. Calgary) and Ontario (e.g. Toronto) in 2013, causing massive damage.
Overland flooding should not be confused with other types of flooding that may occur at home, such as sewer overflow or flooding caused by neighbors. These kinds of floods are usually covered by home insurance policies or supplementary riders that may be obtained for a little fee.
What are the two types of flood insurance?
Flood insurance is a stand-alone policy that protects your house and personal items from damage caused by flooding. Flooding is defined as an overflow of water onto normally dry ground, but there are several exceptions to flood rules. Flood insurance, for example, does not usually cover mudslides.
Flood-related losses are not covered by typical homeowners, condo owners, or renters insurance, thus having flood insurance may be useful. The National Flood Insurance Program (NFIP) and several commercial insurance companies offer flood insurance coverage. Flood coverage is available as an endorsement from a few homeowners insurance providers, such as Kin.
Flood insurance coverage are usually subject to a 30-day waiting period. This period may be waived in some circumstances, such as when you need flood insurance to close on or refinance a house, or if your home is included in a newly defined flood zone within a specified timeframe.
What does flood insurance cover?
There are only two types of coverage available in NFIP flood insurance policies: dwelling coverage and contents coverage.
- Dwelling coverage: This is the foundation of your flood insurance policy and is required to acquire a policy you cannot opt out of it. Dwelling coverage protects your home’s structure, built-in appliances, and related structures from the financial consequences of flooding.
- Contents coverage: Up to your policy limitations, contents coverage covers your items, including clothing, furniture, and home decor. This is an optional policy, and NFIP flood plans can be purchased without personal property coverage.
Because the government is not paying out claims, private insurance companies have more flexibility than the NFIP in terms of flood insurance coverage. With a private carrier, you may be able to get different coverage or coverage through larger limits than you can with the NFIP. Getting estimates from a few different providers, just like with home insurance, could help you locate the best flood insurance for your needs.
What is not covered under flood insurance?
Exclusions apply to flood insurance plans, just as they do to home insurance policies. Damage caused by moisture, mildew, or mold that might have been avoided is not covered by flood insurance. Damage to outdoor belongings such as decks, patios, and pools, as well as damage caused by ground movement, are frequently excluded. Landscaping isn’t covered either. Your flood insurance policy may not cover additional living expenses if you are displaced due to damage to your house.
Flood insurance is designed to protect you from the financial consequences of a true flood. The term “flooding” refers to the accumulation of water on ordinarily dry ground. Internal water damage to a property, such as failed sump pumps causing water to back up in a basement or a burst pipe causing water damage to a wall or floor, is not covered by flood insurance, but it may be covered by your home insurance policy, depending on the extra coverage you have.
What is the difference between ground water and overland water?
Due to the severe flooding that occurred in Calgary and Toronto in 2013, causing millions of dollars in damage, insurers have been forced to examine the flood, sewer backup, and water damage coverages they offer and ensure wordings are updated to reflect our country’s changing climate.
Water that enters the residence from fresh water sources such as overflowing rivers, lakes, ponds, or rain accumulation is referred to as overland water.
Floods from salt water sources such as tsunamis and tidal waves enters the home and causes flooding.
The escape or back up of water or sewage from a sewer line into a home, including the failure of a sump pump or septic system, is known as sewer back up.
None of the above-mentioned coverages are included in the most basic house insurance policy. Unless you acquire extra coverages, it may only provide limited coverage for some forms of water damage, such as burst pipes and appliance malfunction.
Aviva offers a “Overland Water Endorsement” that covers losses caused by unexpected build-up or run-off of surface water, as well as overflow from any body of fresh water. To provide optimum protection, this coverage works in conjunction with the existing sewer backup coverage.
RSA offers a waterproof coverage that combines sewage backup and flooding coverage for incidences of flooding caused by fresh water, drains, down spouts, and eaves.
The technique taken by Intact/Novex is a little different.
Their plan includes different levels of coverage depending on where you live. When an insured sewage backup loss occurs, their sewer backup coverage covers $1,000 toward the installation of a sewer backup loss mitigation system such as a backwater valve or a sump pump with a backup system. Water and sewer line coverage is also available. Depending on where you reside, overland water coverage may be available.
Overland water is defined by Intact/Novex as sewer backup induced by surface water intrusion and flood exposures such as a lake or river overflow. Ground water is a fourth covering that refers to the sudden and unintentional intrusion of water through basement walls, foundations, or flooring. This coverage is optional and can be purchased in conjunction with overland water coverage with comparable limitations.
It’s vital to remember that if overland water enters the residence at the same time as a sewer backup, overland water is the responsive coverage, therefore sewer backup coverage alone isn’t enough.
It’s critical that you understand what coverage you have, where any gaps in your policy may exist, and that you’re secure in your understanding of how your policy will respond in the case of a loss.
What does overland water coverage cover?
Although standard property policies may cover basic water-related hazards like broken pipes and sewer backups, there has previously been no coverage available in Canada for water entering and destroying a property “overland.” Water accumulation from severe rain, spring run-offs, or overflowing rivers and inland bodies of water can all contribute to this.
According to a 2014 analysis from Statistics Canada, average temperatures in Canada have risen by 1.6 degrees Celsius during the last 67 years. According to the agreements adopted at the 21st Conference of the Parties (COP21) in Paris, France, global temperatures will rise by a minimum of 1.5 degrees Celsius and most likely 2 degrees Celsius or more by 2100 as a result of global warming. Even the most pessimistic climate change estimates will almost certainly result in wetter, more unpredictable, and more intense weather across the country, which will only become worse as more carbon accumulates in the atmosphere.
The flooding in Southern Alberta in 2013 highlighted a gap in standard insurance policies regarding compensation for property damage caused by overland water. The cost of the Alberta floods alone was projected to be $2.2 billion, with an estimated 100,000 families affected. Other recent floods, such as the $940 million in damages in 2013 Toronto, Ontario, and the $1 billion in damages in 2014 Southern Manitoba, only served to bolster the need for overland water coverage. It’s easy to understand the hardship you’d face if you had a loss and no appropriate coverage was available water damage can be devastating. With the exception of Quebec, Aviva Canada and RSA now offer overland water coverage in all provinces in response to this risk. Overland water coverage will be available from Intact/Novex for new business beginning in February 2016 and for renewals beginning in April.
Water Coverage Available
Most insurance companies divide their water damage coverage into three parts:
- Basic Coverage – Provides protection against losses caused by unforeseen incidents such as burst water pipes, overflowing bathtubs, and broken/leaky aquariums. Basic water coverage is normally included in your home insurance policy, however coverage for burst water pipes may be contingent on your house being checked on a regular basis or on the water being shut off and pipes being emptied if you are gone for more than four days.
- Sewer Back-up and Sump Pump Coverage Provides coverage for losses caused by water or sewage backing up into sewers or drains leading to sewers. Water must not enter the property via an overland source, according to the coverage restriction. This coverage is normally available for an extra fee to existing property policyholders.
- Overland Water Coverage Provides general coverage for loss or damage caused by water entering a property as a result of heavy rains, spring run-off, or overflow from lakes or rivers, and is widely available to practically all homeowners, condominium owners, and tenants. The cost of this coverage will vary depending on the risk profile of particular properties, but it is likely that insurance for many homes will be inexpensive. The only exception is if you live in a known flood area, in which case your insurance costs will be higher.
Conclusion
For most people, their home is their most precious possession, therefore it only makes sense for them to take reasonable safeguards to safeguard their investments.
In the past, large floods have accounted for over 40% of all natural disasters that have occurred in Canada. Recent occurrences and statistics demonstrate that homeowners should be even more concerned about overland water. In the face of a growing danger of loss from overland water damage, homeowners should look into coverage options and determine whether the cost is reasonable for their situation.
Is there flood insurance in Canada?
This form of insurance was once uncommon in Canada, but the rise in natural flooding disasters as a result of climate change has changed that. While there is presently no national flood insurance policy, federal planning has begun. Get customized quotes from the best home insurance companies in Canada.
What is overland water damage?
Water damage from a lake or river overflow, strong rain, or rapid snowmelt that penetrates your home from a point at or above ground level is covered.
What is overland water endorsement?
An overland water endorsement on your homeowner’s insurance policy protects you from flooding caused by rising rivers, streams, or other bodies of water that overflow onto dry land and cause damage to your home. It can also protect your property from excessive rain or snow buildup, as well as the thawing that follows. All of these water sources find their way into your home through windows, doors, and foundation cracks. If water gets into your basement, you’ll need overland water protection.
Should I get flood insurance on my home?
Flood insurance is not needed for California homeowners, but it is often required by mortgage lenders if your home is located in a high-risk flood zone. Because these “special flood danger regions” are re-evaluated over time, it’s recommended to consult the Federal Emergency Management Agency’s Flood Maps to see if your home is at risk of flooding.
If you want to get a federally backed mortgage, you’ll need flood insurance, according to a map of California’s flood zones. This is usually the case for zones that begin with the letters A or V. If you live in a Zone B, X, or C location, your home has a less than 1% annual probability of flooding, and you won’t be needed to obtain flood insurance.
Even if flood insurance isn’t needed, it’s usually a good idea to consider it unless your home is distant from any dams or levees and is at a higher elevation than the rest of the neighborhood. Damage to your property will not be covered by your homes insurance policy if a flood occurs, as flooding is usually a specified exclusion. And unless a federal catastrophe is declared, you’re unlikely to obtain government assistance.
Risks of flooding in California
Flooding threatens the majority of California, and every county has been declared a flood disaster at least once. Heavy rains in northern and central California have caused rivers to flood in recent years, causing harm to the surrounding environment.
These floods have the potential to cause harm to your home and belongings. While flood insurance doesn’t cover everything and has policy restrictions, you could easily be on the hook for hundreds of thousands of dollars in costs if you don’t have it.