Should You Get Flood Insurance For Your Home?

You may have heard horror stories of water gushing into homes and ruining the interior and all the belongings that crossed the water's path. When this happens, an immediate call to the insurance company is warranted to get some financial assistance to pay for the damages caused.

But is flooding covered under your home insurance policy? If not, should you buy flood insurance?

What is Flood Insurance?

Flood insurance is a type of insurance that provides coverage in the event that your home suffers damages as a result of overland flooding. This type of flooding refers to water flowing over land and making its way into your home through the doors, windows, and cracks.

It happens somewhat frequently in Canada and can cause significant damage. In fact, overland flooding is the cause of millions of dollars in damages every year in Canada.

Flood insurance was only recently introduced in Canada in 2015. The question is, do you need insurance to specifically cover damage to your home from overland flooding?

Does Your Home Insurance Policy Cover Damage From Flooding?

Many Canadian homeowners assume that their home insurance plan covers damage done by flooding. However, many of these homeowners end up finding out the hard way that such damage is not always covered. In many cases, a separate policy must be purchased to ensure such coverage.

To insurance companies, a flood must be specifically defined in order to determine whether or not the damage is covered. What's important is where the water came from and how it entered the house.

Generally speaking, insurance providers use terms like 'overland flooding', which we just discussed, to refer to floods that are caused specifically by rain, melting snow, or even water escaping from a dam. As mentioned, floods are typically not automatically included in an insurance policy.

Further, water damage caused by water flowing into your home from things like toilet overflows, bad plumbing, faulty sprinklers, or other issues may not fall under a basic, bare-bones home insurance policy. But, they are typically included in more comprehensive plans.

One exception that homeowners should be aware of is water damage caused by a sewer backup. This does not count as flooding in the eyes of insurance companies. Standard insurance coverage will not compensate for sewer backups. Instead, you'll need specific coverage added to your policy.

And even if you have this additional coverage, you'll still need to make sure that a sewer backup valve is properly installed. Otherwise, the insurance company may deem your home poorly maintained and may deny you coverage in the event of damage caused by a sewer backup, even though you have this specific type of coverage.

You may not live in an area where flooding is common, but there are certainly instances where water can make its way into your home, especially in the basement. And the damage it can cause can be astronomical, as is the cost of repair