Overland water coverage is a topic many Canadians aren’t very familiar with. Insurers began to realize that they needed to help homeowners, landlords and tenants protect themselves from the impact of water damage after flooding became more common in 2013. In 2018, Desjardins Group reported that water is the most common cause of property damage, accounting for 50% of home insurance claim costs. That makes it the leading cause of home insurance claims and a risk that many policies don’t completely cover. But how can you make sure you’re properly covered? We’ve created a guide for the different types of water damage you may encounter. Additionally, we highlight the importance of overland water coverage, which is a crucial add-on endorsement to your homeowner’s policy.
What is overland flooding?
In insurance terms, overland water is fresh water that flows above ground, such as:
- Overflow of any body of fresh water, such as lakes and rivers
- Heavy rain, spring run-off or melting snow/ice
Overland water enters your home through windows, doors or other ground-level sources. Overland water can also make your house or apartment inaccessible and unliveable while it is flooded or being fixed.
The basics of water damage coverage
Historically in Canada, home insurance policies haven’t covered loss or damage caused by overland flooding. However, because extreme weather events are becoming more frequent, many insurers are now providing policyholders with the option to purchase the overland flood endorsement. This add-on to your policy can give you protection from external water sources that find windows, doors, and cracks in your foundation to enter your home.
Water damage coverage is usually broken down into three components for most insurers:
- Basic coverage: Offers protection for losses resulting from unforeseen events inside the home. This includes burst water pipes, overflowing bathtubs, and broken/leaky aquariums.
- Sewer back-up and sump pump coverage: Offers protection for losses resulting from water back-up or sewage from drains leading to sewers.
- Overland water coverage: Offers protection for loss or damage related to water entering a property from a sudden accumulation of water. This usually results from heavy rainfall, spring run-off or overflow from lakes or rivers.
FYI: The 2018 Desjardins survey finds 1 in 4 Canadians have experienced water damage to their home, but only half know what’s covered by their insurance policy.
Overland water coverage or “flood insurance”
Overland water coverage insures against losses, such as:
- Rain accumulation on the surface that enters through basement windows or a crack in an above grade basement wall
- Rain accumulation on the surface and entering through the garage door
- Sewer backup due to heavy rain and surface water also entering the home
- Sewer backup due to the overflow of a body of freshwater or lake (oceans are not covered!)
Important: Not all homes are eligible for Overland Water Coverage. If you live in an area that is considered to be a high-risk flood zone, it is not likely to be available.
What is not covered?
Overland flood insurance covers damage from freshwater sources. This means that any claims related to coastal flooding, tsunamis and other saltwater sources are excluded. Dam breaks are also specifically designated as uncovered occurrences.
Certain water-damage losses are NEVER covered by your policy. These types of losses can include:
- Long-lasting seepage and leakage
- Rain or snow entering through an open window
- Roof leaking due to wear-and-tear
Preventing water damage to your home
Not all water damage is preventable, but much of it is. There are a few ways you can reduce your odds of being impacted by water loss, such as:
- Ensure that your downspouts discharge away from your home’s foundation
- Make sure that your sump work is working correctly and consider adding a battery backup for it in case it needs to work hard during a power outage
- Clean your eaves troughs regularly
- Install a backwater valve (some cities/municipalities offer rebates on this preventative measure)
- Design your landscaping to allow water to run away from your house
- Install window wells and barriers outside basement windows
- Regular inspections each spring for soil erosion, as well as cracks in your home’s walls and foundation
How much does overland water coverage cost?
It depends. The cost of this coverage is based on the risk of overland water flooding in your area. If you’re in a low-risk area, it will cost less to add this coverage. Furthermore, you can sometimes add overland protection at no cost if you have sewer back-up protection. If you’re adding it on its own, you’re looking at $10-$30 (roughly) per month. You must already carry sewer backup coverage to be eligible to add overland water coverage. It’s important to note that it’s not a stand-alone coverage. If your basement is waterproofed, it can be even cheaper, depending on your home insurance provider.
However, if you live in a slightly riskier area – at the bottom of a hill, near a body of water, or in an area prone to heavier rainfall and snow – you can pay significantly more. Rates for this coverage will vary according to the risk profile of individual properties. However, the exception to this will be if you reside in a known flood plain, making insurance rates correspondingly higher.
Important: Your home may not qualify for this endorsement if the risk of flooding is too high in your area. The best way to determine your coverage eligibility is to contact isure today and learn more about your options.
Purchasing overland water insurance
Read your policy carefully and consult with your isure broker about whether you should consider buying overland water coverage. You can purchase this type of coverage if you live in an area designated as a flood zone. If you have an all-risk or comprehensive policy, there is coverage for all water damage, except those your insurer will specifically mention. Even if you don’t live by a lake or river, your home can still experience overland water damage in a variety of different ways. Be sure to speak with an isure representative today to discuss protecting your home from overland water damage today.
Have more questions? Check out our Overland Water Damage Q & A by clicking here.