FLOOD INSURANCE
Are you covered?
For the home insurance industry, flooding is the new fire.
And Canada’s first insurer to offer coverage for overland flood damage, Aviva Canada Inc., brings the policy to market next month in Ontario and Alberta — both hit hard by flooding in 2013.
Aviva says $180 million, or 44 per cent of funds, was paid out in 2014 for water damage — up from 39 per cent a decade earlier. Water has taken over from fire damage as the country’s top insurance claim.
“Why did it take so long? We didn’t have the right maps,” says Sharon Ludlow, Aviva president.
She was referring to dramatic weather surges that have now prompted government flood mapping and the gathering of weather metrics by the insurance industry.
“And now we’ve had some helpful, but very tragic, events — but helpful in the way we can now assess how and where those exposures are, what the risks are and provide coverage against that.
“We’re seeing more water events and more flash events than we’ve seen before, and it’s tied in some fashion to climate change,” says Ludlow.
In 2014, Aviva paid out 57 per cent more in water damage claims than in 2012.
Renovated basements have soared in popularity in the past couple of decades, she notes, and that can partly explain the increased claims.
Much like fire alarms, flood alarms can be installed to alert homeowners and help them save valuables from damage. Homeowners whose sump pumps and water backup protection have been inspected stand to get better rates. Another way to ameliorate coverage is to have property grading inspected and issues addressed, such as water pooling in areas like basement window wells. Downspouts and eaves should also be aimed away from homes and their foundations.
Pete Karageorgos at the Insurance Bureau of Canada for Ontario Region, says shingle replacement can also reduce policy rates.
“Look at your roofs,” he said. “They don’t last forever, so make sure shingles don’t need replacing and that you don’t have expensive repairs to do afterwards. With wind storms and even winter, snow melts or freezes — which can cause ice damming — it can cause water to leak into the roof and then seep down walls and ceilings.”
Karageorgos says every homeowner should have both internal water and sewer backup coverage because burst pipes, plumbing connections and aging infrastructure are responsible for the lion’s share of water damage.
Having enough insurance coverage is key. Many Ontarians and Albertans learned that the hard way after the floods of 2013, a year during which the Canadian insurance industry doled out $3.2 billion in claims for damage, the most expensive on record.
“People may have had $10,000 worth of coverage for sewer backup, washer, dryer or freezers — but the furnace might have been damaged,” said Karageorgos.