Should you buy flood insurance in Canada?

With files from Tyler Wade

This article was originally published on August 7, 2019 and was updated on September 12, 2025.

Across Canada, we’re experiencing an influx of heavy rainfall and flash floods, resulting in serious damage and costly repairs. As of September 2025, the total cost of insured losses from severe weather events sits at $1.6 billion. The flash floods that hit Montreal this past July caused about $120 million in insured damage alone. 

As with all insurance products, the more claims made, the higher the premiums become for policyholders, as insurers try to recoup their payouts. We are seeing this happen across the country as home and auto insurance prices continue to rise. 

With more pressure on Canadian wallets, many may be considering whether purchasing additional flood coverage is worth it. 

Let’s break down whether or not you should buy flood insurance in Canada. 

Do home and auto insurance policies cover flooding? 

No, most standard home and auto insurance policies do not include flood insurance. Instead, policyholders need to purchase additional endorsements to be covered. 

Flood insurance for homes

Homeowners across Canada can opt to buy flood insurance endorsements. Most insurance companies offer overland water coverage, sewer backup insurance and storm surge coverage. 

Without these endorsements or without enough coverage, homeowners will be required to pay for repairs or replacements out of pocket. As expected, this can get expensive. It’s why having coverage is so important, especially for homeowners who live in flood plains or other high-risk areas. However, in some locations, flood insurance may be difficult to secure or too expensive because the risk of flooding is high. 

Also read: Does home insurance cover water damage?

Flood insurance for cars

Most people often overlook protecting their vehicles from rainfall and floods. However, as severe weather becomes more frequent, the risk of water damage to your car increases. 

As with home insurance, standard auto insurance policies do not cover water damage. Drivers are only covered if they purchase additional coverage, such as comprehensive car insurance. With this insurance, you’ll be covered for the cost of repairs and be eligible for a cash payment if your car is a write-off. Without the coverage, you will be required to repair or replace your car on your own. 

What are the pros and cons of buying flood insurance? 

Pros of buying flood insurance

1. Financial protection:

Opting for flood endorsements means you will be covered in the event of basement floods, roof damage or other deterioration to your home. Instead of being on the hook for the entire basement repair, you’ll just need to pay for the deductible. This can save you thousands of dollars. The same goes for vehicles. If you drive a new model or an electric vehicle, the cost of repairing or replacing it can be extremely high. The right insurance will make sure you are financially protected. 

2. Eligible discounts:

While flood insurance is an extra fee on top of your standard policy, many providers will offer you a discount for installing flood prevention measures in your home. For example, if you have a sump pump or backwater valve, it’s common to get a break in your premiums. If you live in an area at high risk of flooding, having these preventative measures may make you eligible for coverage, as some providers may not insure homes in your area. 

3. Payouts are quicker:

When your home or car is flooded, fixing the damage is typically a priority. With your own private insurance policy, you’re likely to receive your payout promptly, making the process of repairing or replacing the damage smoother. Relying on government programs may take longer and come with stricter limitations.

4. Peace of mind:

Reassurance is often priceless. Severe weather and floods are common across Canada, making any location vulnerable. So, knowing that you have financial protection can help ease your mind when it’s raining heavily outside. This is especially true if you park your vehicle in an unprotected area.

Cons of buying flood insurance

1. Higher premiums:

Flood insurance is an optional add-on to your home insurance policy, meaning your premium will increase with the endorsement. If you already find your home insurance to be expensive, be mindful of the additional cost when considering whether you should buy flood insurance. Living in risky areas can also contribute to higher premiums, as insurers often charge more when the potential of a flood occurring is higher. The same can be said for comprehensive car insurance, as it will add to your premium. 

2. Coverage limitations:

Consider how much coverage you’re purchasing and whether it is sufficient to cover the damage from a potential flood in your home or vehicle. While partial insurance is better than none, reviewing your policy for any limitations is essential to securing complete financial protection, as claim payouts may not be enough to cover the total costs. 

3. Access and availability:

Not all areas are eligible for flood insurance coverage. High-risk zones, such as those on floodplains or at the base of hills, may not be offered insurance at all. Or they’ll be charged much higher than homes in lower-risk locations. 

4. Actual usage:

Buying flood insurance, like all insurance products, is an extra layer of protection that you may never use. While you’ll pay for the coverage, you may never get a payout from your insurance company if you never submit a claim. Assess your level of risk and decide whether you want to incur the extra cost. For your vehicle, consider whether buying comprehensive insurance is a good fit for you. If you drive an older car, it might not be worth paying the additional costs. 

So, should you buy flood insurance in Canada? 

The answer depends on factors like the location of your home and your financial situation. However, having an added layer of protection is always a smart idea. In many cases, the cost of not having flood insurance outweighs the cost of purchasing endorsements. 

 How to decide if it is right for you:

If you’re still indecisive about whether to buy flood insurance, ask yourself the following questions: 

• Do you live in an area at high risk of flooding? For example, near water or in a flood plain?
• Do you live in an area with older drainage systems that are likely to overflow?
• Have there been recent floods in your neighbourhood?
• Is your car protected from water damage? Is it parked in a garage or a covered space?
• Can you afford to repair or replace your home or car without the help of insurance? 

Your answers will help you determine whether or not you’re vulnerable to a flood and the financial position you’re in to pay for the damages. 

You can always help yourself by setting aside an emergency fund to cover unexpected costs; however, the peace of mind you’ll have by securing coverage is unmatched. 

The bottom line

Flooding is a serious concern in Canada as more homes are affected by severe weather events. If you’re debating whether you should buy flood insurance, consider your current situation and whether you can afford to repair or replace your home and vehicle without the help of insurance. For many Canadians, insurance and flooding go hand in hand. So, having both flood endorsements and comprehensive car insurance is ideal. 

To find affordable premiums with the right level of coverage, compare home insurance quotes online. You can also choose to bundle your home and auto policies for extra cost savings. 

Also read:

• Does home insurance cover water damage?
• Spring flooding and home insurance: Are you really covered?
• Climate change and its impact on your insurance
• Spring cleaning: Home insurance tips for severe weather
• Building in high-risk areas: The effect on housing affordability