Flood­ing in­sur­ance is ex­tra

Most home­own­ers don’t have cov­er­age; It’s avail­able as an add-on to your pol­icy

The Hamilton Spectator - - CANADA & WORLD - ALEXAN­DRA POSADZKI

TORONTO — 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 flood wa­ters 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.

“In­sur­ance is meant to make you whole,” Stewart says.

That’s in con­trast to gov­ern­ment as­sis­tance, which will help com­pen­sate home­own­ers for their losses, but typ­i­cally fo­cuses on core es­sen­tials.

Ja­son Thistleth­waite, an as­sis­tant pro­fes­sor in the fac­ulty of en­vi­ron­ment at the Univer­sity of Water­loo, says many Cana­di­ans lack the in­for­ma­tion they need about flood risk.

For ex­am­ple, many Cana­di­ans think fire poses the big­gest threat to their homes, when in fact flood dam­age is more com­mon, Thistleth­waite says.

Thistleth­waite co-au­thored a study last year that sur­veyed 2,300 Cana­di­ans who live in high-risk flood ar­eas.

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