Flood Insurance – Are You Covered?

Flooding is becoming a more common problem in Ontario; with flash flooding caused by heavy downpours, runoff when fluctuating temperatures suddenly melt snow, and waves reaching new heights in Lake Ontario. Whether you own your home or rent, it’s important to know if your home is protected in the event of a flood.

You might be surpised to learn that most home insurance plans do not cover flood damage, although it is implied that they do. If you read your policy carefully, you might see that there is coverage for water damage. Usually, though, that only includes water damage that results from water entering through broken pipes or a backed up toilet. Flood water that makes it in through your windows or foundation is counted as “Overland” water, and is counted as a completely different type of damage – even though the water damage you might incur from a broken pipe might be very similar to the water damage from a flood.

Insurance companies claim that they never included Overland water coverage by default here because it was not necessary. Flooding was very uncommon in Ontario, so they only offered the coverage as an add on. Even though it has become far more frequent, it is still only offered as an add on. So chances are, unless you’ve specially arranged for Overland flood insurance, you will likely have no insurance coverage towards flood damage at all. It’s important to be aware of this especially if you live in a house with basement windows, a house located in a low lying area, or near a lake.

Even if you rent, it is important to have your own insurance. Although your landlord is required to have insurance coverage for the property, your possessions are not necessarily covered by your landlord’s insurance plan. Tenants can purchase contents insurance to protect their own items if something should happen in your rental unit. As with homeowners insurance, contents insurance does not usually include Overland flood coverage. You will need to ask specifically for that if you feel you are at risk. High-rise apartments are not likely to ever need this, but if you live in a basement apartment or rent a house, you should definitely consider adding Overland flood protection to your insurance coverage, and ensure you stay afloat in the event of a flood.