Home News Know about flood insurance


Know about flood insurance 2017-07-14

By: Bob Weinstein | LIVING BETTER


A new survey conducted by the University of Waterloo said that few Canadians feel they are at risk for flooding. And few know if their insurance would cover flood damage, CBC News recently reported.


The disturbing reality is that most home insurance policies don’t include flood insurance, according to a CBC Toronto story.

Most Canadians — from New Brunswick to Quebec, through Ontario, Manitoba and to British Columbia — have been dealing with flooding or torrential downpours, said Global News. The irony is that flood insurance is still a relatively new concept.

There are two major types of insurance against flooding: regular flood insurance and overland flood insurance.


Buyer beware

Provinces don’t regulate these types of insurance, so pricing depends on the provider, your address and your property, said Blair Feltmate, a climate-adaption expert at the Ontario-based University of Waterloo. Since it’s a very competitive environment, don’t assume they operate in the same way, he added.


Since the cost of flood insurance can vary greatly, experts advise shopping around for affordable coverage. Most important, read the fine print carefully to find out whether there is a cap on the amount of damage covered. In major cities, a flooded basement costs an average of $42,000. And not all insurers will cover 100 per cent of the damage.


In general, be careful when shopping for home insurance, cautioned a recent Consumer Reports survey.


Here are a few home insurance tips from the CR survey that can save homeowners money and grief:


You may be overpaying

Homeowners insurance isn’t as price-competitive as auto insurance, for example. However, you can still save “hundreds to more than $1,000 per year in premiums by shopping around,” said CR.


Carefully assess your risks & coverage needs

CR advises working with an independent agent who can compare premiums. Independent agents aren’t beholden to one company. Their job is to scour the market for the best coverage at an affordable price.


Make sure you have enough coverage

Many homeowners don’t realize that a standard homeowners’ policy doesn’t cover everything. Fifty-six per cent of homeowners incorrectly think that flood insurance is covered by a standard policy, reported Princeton Survey Research Associates International. CR advises working closely with your agent to buy separate flood and earthquake protection.


Homeowners may also need to buy a separate hurricane policy if they live in a high-risk zone. CR also said that additional add-ons are a must to cover sewer backups or the extra cost of rebuilding, according to new codes and ordinances.


Additionally, consider extended replacement-cost coverage, which usually pays up to 25 per cent beyond regular limits to cover the spike in materials and labour prices that usually occurs following natural disasters.



CR said that a typical policy “covers the structure and outbuildings, the contents of the house, personal liability if you or your family cause damages to others and additional living expenses if your house is so badly damaged you need a temporary place to live.”