How does the saying go? April showers bring May flowers? But before the spring season and potential rainfall comes, you might want to dig out your insurance policy. Excessive rainfall can cause extensive water damage and not all insurance policies will cover it. It’s an extreme case, but something we should be prepared for at all times. Our insurance expert tells us why.
Have you looked at your property insurance policy lately? If you take a closer look at the fine print, you might find you may not be adequately covered for water damage. That’s because many people simply assume all water damage is an insured loss. In fact, it’s not always covered by insurance. It’s important for homeowners to be aware of the different types of loss caused by water damage so that, in cases where no coverage is provided, you can take the necessary steps to prevent or mitigate future loss.
Why is this important?
Look at past weather trends. Within the last year, many parts of Manitoba and Saskatchewan were hit by severe flooding caused by excessive rainfall, which caused billions of dollars in damage to homes and businesses.
*This type of weather is not uncommon in certain areas across the country and can cause significant damage to any home.
Many people were furious to learn that some damage was not covered by their homeowner’s insurance policies. However, there were those who had some, or all, of their damage paid for. HOW, might you ask? The answer is written in the fine print of your insurance policy.
The levels of water damage
There are three major categories of water damage loss:
- Water escape/rupture
This type of damage is considered to be of a sudden and accidental nature. An example is a copper pipe bursting because of too much water pressure. The resulting damage is considered an insured loss. Although water escape and rupture is built into every homeowner’s insurance policy, if the damage is deemed to be continuous and ongoing, there is no coverage. During extreme weather conditions, many homes suffer damage due to surface water that made its way through foundation cracks. Damage of this nature is not covered. To prevent this damage, it’s important to regularly check the foundation where exposed for any fissures or cracks. If the home has a finished basement, it will be much harder to tell if there are any cracks in the foundation. A regular home inspection by an accredited home inspector with the proper tools can locate sources of potential water penetration.
The rising of a natural body of water. Home and cottage owners who file a claim with their insurance companies after their properties were damaged by floods may be surprised to find that the damage caused by the rising flood and subsequent surface water was in fact uninsured. When I tell people this information, they are usually surprised or angry. The reason is because flood damage is considered an “uninsurable” loss, much like damage caused by terrorism or war. If insurers paid out flood damage, they would go bankrupt.
- Sewer backup
This refers to the backing up of a sewer or drainpipe, with the subsequent backup causing damage. Most people assume that this coverage is already included on their policy. It’s not automatically included in any insurance policy. If it’s not specifically requested, it’s not given. Some flood victims have actually had their damages covered if the water came through the drain or sewer as opposed to the foundation or other opening. Make sure sewer backup is included on your policy, even if you live in a high rise apartment or condo!
Educate yourself about insurance and ask the right questions
As clear-cut as insurers try to be, there are still far too many grey areas as far as whether or not a specific water damage loss will be covered. If you are experiencing a water damage loss, or you simply have a water damage-related question, your best bet is to contact your insurance broker or agent for advice. They are knowledgeable on their companies’ policy wordings and will be able to clarify what is and isn’t covered. All it takes is a quick phone call; it may be one of the most important calls you ever make!
About the Author
Daniel Italiano is an insurance broker, specializing in commercial insurance for small and mid-sized businesses. He is one of the directors of the not-for-profit networking group Young Insurance Professionals of Toronto.
Has water damage severely damaged your home? Bring in an expert to assess the situation. We have a list of general contractors and home renovation/improvement experts who will be able to get your home back in order.