This post was originally published on February 19, 2019, and was updated on November 12, 2023.
Did you know: overland water does not come standard with your home insurance policy, but it’s likely to be the most valuable add-on should you need it?
Floods have surpassed fire in Canada in terms of insurable events and now rank number one in terms of property damage. Floods are also the most expensive natural disaster – according to the Insurance Bureau of Canada, there have been 35 catastrophic flooding events across the country in the last decade, exceeding $30 million in damages per flood. That amounts to total insured losses of close to $800 million annually. Flooding in Calgary and Toronto in 2013 alone, for example, resulted in $3.1 billion in paid-out claims by property and casualty insurers.
An overland water endorsement on your home insurance policy protects you and your property from particular water damage risks – let’s review how it works and whether it’s right for you.
What is overland water house insurance coverage?
An overland water endorsement (which is a form of flood insurance coverage) on your home insurance policy gives you protection from rising rivers, streams, or other bodies of water that may overflow onto dry land causing damage to your home. It can also protect against heavy rain precipitation, or snow accumulation, and its eventual thaw, around your property. All these water sources find windows, doors, and cracks in your foundation to enter your home. If water enters your basement, you’ll want overland water coverage.
Why you need overland water protection
Overland water coverage is an important consideration, whether or not your basement is finished or unfinished.
For the latter, having drywall, laminate flooring, and furnishings can increase the cost of damage further. Without proper coverage, you may be left footing the bill on your own. According to Blair Feltmate, head of the Intact Centre on Climate Adaptation, the average flooded basement in an urban centre will cost $43,000 in damages to repair.
It’s also important to check regularly for any water sneaking into your basement and causing incremental damage over time. If mold is discovered due to long-term seepage, for example, that could void your insurance coverage.
If water is seeping into any basement, finished or not, it may be worth the cost to waterproof your basement. Water in the walls can freeze, thaw, and damage your foundation which can lead to even more significant issues. It can also seep into wood, causing rot. The best way to waterproof your basement is to have a trench dug around your home and a waterproof membrane installed against the foundation.
Source: RCC Waterproofing
Will overland water affect you?
Severe weather damage claims are on the rise with major floods representing almost 40% of all natural disasters in Canada, according to Aviva Canada. If your basement isn’t waterproofed, your eavestroughs and downspouts are in need of repair, or you have cracks in your foundation, it could be worth adding it to your current house insurance policy or when shopping around for new home insurance quotes.
How much does overland water home insurance cost?
I did some digging around and, much like any form of insurance, the price can vary. For instance, if you’re in a low-risk area, away from water, you can sometimes add overland water protection at no cost, if you already have sewer back up protection. If you’re adding overland water coverage on its own, you’re looking at about $10-$30 roughly per month.
However, If you live in a slightly riskier area – at the bottom of a hill, near a body of water, and in an area prone to heavier rainfall and snow – you could pay significantly more, or be refused coverage entirely. For these areas, the federal government has plans to roll out a National Flood Insurance Program to offer coverage where an insurance company will not.
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What overland coverage does not cover
There are several types of water insurance coverage for your home, and it’s important to understand the differences when searching for insurance. For instance, sewer back up insurance protects your home from main drains overflowing causing sewage to enter your house through the floor drains, not water coming in through your foundation.
Things like burst pipes, however, will be covered instead by a comprehensive home insurance policy.
In some cases, overland water coverage is called groundwater coverage – different insurers may have various names for the product. Seek clarity when speaking to your provider, understand what you’re paying for, how you are and aren’t protected, and at what cost.
The bottom line
No matter how you choose to protect your home, do it. It’s not worth risking the headaches and costs associated with water damage to your most valuable asset. Keep your home safe with proper care, preventative maintenance, and the right homeowner’s insurance policy.