Many poli­cies don’t cover flood­ing, and home­own­ers could be on hook

Cape Breton Post - - Business -

The ma­jor­ity of Cana­dian home­own­ers aren’t in­sured for flood­ing and could be left foot­ing at least part of the bill af­ter heavy rains in sev­eral ar­eas across the coun­try, ex­perts say.

Craig Stewart, vice-pres­i­dent of fed­eral af­fairs for the In­sur­ance Bu­reau of Canada, es­ti­mates that only 10 to 15 per cent of Cana­di­ans have so-called “over­land flood in­sur­ance,’’ which is of­fered as an add-on to in­sur­ance poli­cies.

Stewart says that’s be­cause it’s a fairly new prod­uct that wasn’t avail­able prior to 2013, when se­vere flood­ing hit Toronto and Alberta.

“That was pri­mar­ily be­cause we did not have flood risk maps de­vel­oped for the whole coun­try,’’ Stewart says.

“The in­sur­ance in­dus­try needs to be able to quan­tify the risks so they can as­sess which pre­mi­ums to charge which peo­ple. Up un­til then there was sim­ply no risk map­ping done to be able to sup­port such poli­cies.’’

Heavy rains left sev­eral com­mu­ni­ties in Que­bec and On­tario strug­gling with ris­ing flood­wa­ters over the week­end, while parts of New Brunswick and Bri­tish Columbia also faced flood­ing.

In­sur­ers started work­ing on the over­land flood in­sur­ance add-on af­ter the 2013 in­ci­dents, but it took time to roll the poli­cies out. Stewart says the prod­uct has been avail­able since late 2015.

The low up­take is likely due to the fact that most Cana­di­ans only in­ter­act with their in­sur­ance bro­ker when the time comes to re­new their pol­icy, Stewart says.

“Most peo­ple are not aware that over­land flood in­sur­ance is avail­able,’’ Stewart says. “There­fore, un­less they have been di­rectly in a con­ver­sa­tion with their bro­ker or their agent at the time of re­newal over the past year, they likely won’t have it.’’

Stewart says most home­own­ers grap­pling with flood dam­age will be left re­ly­ing on gov­ern­ment as­sis­tance, which typ­i­cally cov­ers less than in­sur­ance.

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