Canada is the last country in the G7 to start offering some kind of flood insurance coverage for homeowners. Now the largest insurance companies in Canada have developed and offer flood, or overland water, insurance. This year more companies will be adding the coverage too.
The confusing part of overland water coverage is that each company has their own rules and guidelines about what kinds of homes they will insure, what their rates will be, and who is eligible. On top of that not all companies offer the same kinds of coverage. Some will offer groundwater coverage (see below for definition) while others not at all. Some companies offer overland water coverage, but not all.
There are so many different terms for water coverage in insurance. Some, or all, could apply to your situation. Knowing the difference between what coverages are, and more importantly what they protect against, can save you a lot of headache down the road.
Sudden Escape – This occurs if an internal plumbing line or fixture, or appliance, suddenly ruptures and water leaks into your home causing damage. This is a standard coverage on most home, tenants and condo insurance policies.
Sewer Backup – This occurs if water backs-up and flows into your home from your municipal sewer system, private septic system or through sump pump failure. This is offered on most home, tenants and condo insurance policies as an add-on.
Water and Sewer Lines - In the event you experience a leak, break, tear, rupture or collapse of a water and/or sewer line that causes water damage. This is a new kind of water coverage offered as an add-on.
Overland Water - Coverage for damage caused by overflow of a lake or river, heavy rain or rapid snow-melt that enters your home from a point at or above ground level. This is typically for fresh water. Not all companies offer this coverage.
Ground Water - When water enters your home suddenly and accidentally through a basement wall, the foundation of your house or through the floor. Not all companies offer this coverage.
A broker can find the right coverage and the right company to help protect what matters to you; your family home. Some companies now amend their water coverage to automatically include everything above, others offer the enhanced coverage by endorsement.
Knowing what options you have for your home means you can make an informed decision on the type of water coverage you feel comfortable with on your home, tenants or condo policy.
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