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Extreme weather events, including rainstorms, are on the rise. Now is the time to check if you have enough coverage against water damage.
If you carry a mortgage on your home, you’re legally obligated to have home insurance—but that doesn’t necessarily mean you’re covered against everything life may throw at you. Notably, home insurance typically doesn’t include coverage of water damage from floods and leaks, nor does it cover sudden water damage due to water seeping into your home through your roof or above-ground walls. This is true even for insurance policies that offer the most extensive coverage.
Here’s why that matters: In recent years, climate change has led to more frequent damaging rainfall events (such as severe downpours and thunderstorms), and certain regions are naturally prone to flooding. A flooded basement isn’t cheap to fix—in fact, the average cost to repair that type of damage is over $40,000.
The Insurance Bureau of Canada (IBC) notes that extreme weather events result in an average of $2 billion in annual losses across the country—mostly due to water-related damage. “Over the last decade, there have been more than 35 catastrophic flooding events across Canada in which insured losses exceeded $30 million per flood,” the IBC reports on its website. “Total insured losses from these events have averaged close to $800 million annually over the last decade.”
Unfortunately, many home owners in flood-prone locations don’t know the vulnerability of the areas they live in.
If you aren’t familiar with the details of your home insurance policy, you may want to review it carefully—before you may need to make an insurance claim for water damage.
A survey by TD Insurance found that just over half of Canadians (51%) don’t have extended water damage coverage or are unsure if they do. Around 20% of home owners are worried they don’t have enough coverage against water damage. Half of home owners aged 18 to 34 are concerned about the increased risk of water damage to their properties due to climate change and extreme weather. Looking at home insurance more broadly, only about a third of Canadians believe that their current policy sufficiently covers their needs. That’s a lot of unconfident home owners!
It may be time to revisit your home insurance policy—especially if you’re like the 23% of Canadians who don’t have extended water damage coverage, according to the same TD Insurance survey. Approximately 16% of Canadians have already experienced water damage to their homes, making this type of coverage a must for many households.
Every home owner has unique home insurance needs, but it’s important to look into extended water damage coverage and above-ground water coverage. Standard home insurance covers some types of water damage—a plumbing or sprinkler system rupture, for example—but not all.
Both coverage types are important elements of a home insurance plan, but they’re typically add-ons that you’ll need to discuss with your insurer. If you live in one of Canada’s known flood risk zones, such as Toronto or Vancouver, this will impact your tenant insurance quote.
If you don’t know if you have adequate water damage insurance or if you’re considering upgrading your coverage, talk to your current insurance provider. Avoiding water damage is the best-case scenario for any household, but if it happens, be prepared with great insurance coverage. Your home is worth protecting—no matter what’s in the weather forecast.
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