Flood Insurance

Flooding is the most common and costly natural disaster in Canada, causing billions of dollars in damage each year. As climate change intensifies weather patterns, the frequency and severity of flood events are expected to increase, making flood insurance an increasingly important consideration for Canadian property owners.

There are several types of flooding that can affect Canadian homes and businesses:

Overland Flooding: Occurs when water from rivers, lakes, or heavy rainfall overwhelms drainage systems and flows over the ground surface into buildings. This is the most destructive type of flooding and has historically been uninsurable in Canada. However, many insurers now offer overland water coverage as an optional endorsement.

Sewer Backup: Occurs when municipal sewer systems become overwhelmed during heavy rainfall, causing wastewater to back up into basements through floor drains and plumbing fixtures. This is one of the most common types of water damage claims in Canada.

Groundwater Seepage: Occurs when the water table rises above basement floor levels, causing water to seep through foundation walls and floors. This type of flooding is generally not covered by standard insurance policies.

Understanding your property's flood risk is the first step in determining the appropriate level of protection. Factors that influence flood risk include your proximity to water bodies, your elevation relative to surrounding areas, your local drainage infrastructure, and historical flooding patterns in your area.

The flood insurance landscape in Canada has evolved significantly in recent years, with more options now available for property owners:

Overland Water Coverage: This endorsement covers damage to your property caused by the overflow of a body of fresh water, such as a river or lake, or by heavy rainfall that overwhelms drainage systems. Not all properties qualify for this coverage, particularly those located in high-risk flood zones.

Sewer Backup Coverage: Available as an endorsement to most home and tenant insurance policies, this covers damage caused by the backup of water or sewage through sewers, drains, or sump pumps. Given the high frequency of sewer backup claims, this endorsement is recommended for virtually all property owners with basements.

Ground Water Coverage: A newer product that covers damage from rising ground water or water that seeps through foundation walls and floors. Availability is still limited.

Federal Flood Insurance Programs: The Canadian government has been exploring the development of a national flood insurance program to provide affordable coverage to homeowners in high-risk areas who may not be able to obtain private market coverage.

It is important to carefully review your insurance policy to understand what types of water damage are and are not covered. Standard home insurance policies typically cover sudden and accidental water damage from internal sources (such as a burst pipe) but do not cover overland flooding or sewer backup without the appropriate endorsements.

While insurance provides financial protection after a flood, there are many steps you can take to reduce your risk and minimize potential damage:

Install a Backwater Valve: This device prevents sewage from backing up into your basement through floor drains. It is one of the most effective measures for preventing sewer backup damage. Many municipalities offer rebates for backwater valve installation.

Maintain Your Sump Pump: If your home has a sump pump, ensure it is in good working order, has a battery backup, and is tested regularly. Consider installing an alarm to alert you if the pump fails.

Grade Your Property: Ensure the ground around your home slopes away from the foundation to direct water away from the building. A minimum slope of 2.5 centimetres per 30 centimetres over the first 1.8 metres from the foundation is recommended.

Clean Gutters and Downspouts: Keep gutters clear of debris and ensure downspouts direct water at least 1.8 metres away from your foundation.

Waterproof Your Basement: Apply waterproof coating to interior basement walls and consider exterior waterproofing for homes with persistent moisture issues.

Store Valuables Above Ground Level: Keep important documents, electronics, and sentimental items in upper floors or elevated storage areas to minimize damage in the event of a basement flood.

Know Your Flood Risk: Check your local flood plain maps and understand your property's risk level. This information is often available through your municipality or provincial government.