There are many hazards associated with climate change. For several years, Mother Nature’s wrath has made life difficult for us, particularly for those who reside in homes near a body of water. Even though flooding is common in the spring, a number of people do not realize that this type of event is not covered by a basic home insurance policy. How, then, can we properly insure our homes for flooding?
There is additional coverage available for the basic policy to cover certain types of water damage, which remains one of the most frequent claims.
- Soil and underground water damage including sewer backup
This covers accidental or sudden water seepage or infiltration below ground, e.g., if water seeps into your basement after heavy rainfall.
- Above-ground water damage
This endorsement covers, among other things, damage caused by seepage or infiltration of rain, snow, or ice via the roof, walls, doors, or windows of your property.
Unfortunately, neither of these types of coverage covers damage due to flooding. However, it is now possible to add an endorsement that would cover you for this. For several years, certain insurance companies have offered insurance for flooding caused by an overflowing body of water. Ask your broker if this coverage can be added to your policy.
As noted by Stéphanie Grammond in her article in La Presse, other insurance companies prefer not to have to face the risks of flooding, especially if it affects your home each spring. In this case, it moves away from being a risk and verges on a certainty. Moreover, as the government has been able to prepare a map of flood-prone areas, some insurers feel that flooding is foreseeable.
It is important to consider that even if you add this endorsement to your policy, certain exclusions will apply, including earthquake floods and tsunamis.
What About Government Assistance?
In 2019, the Quebec government offered a general compensation program for actual or imminent disasters. This program, which provides assistance of up to $5,000, was established to compensate those affected by floods and other natural disasters.
Financial assistance is provided for temporary prevention measures, such as the costs associated with temporary lodging and food following an evacuation, protecting the residence (sandbags), storing movable assets, or other work done. If you can benefit from this assistance, it is important to keep supporting documentation to ensure that you are reimbursed.
Note that if you have insurance for flooding, your private insurer takes priority over government assistance, which serves only as a last-resort solution.
In the informative pamphlet about this assistance, the government lists the movable assets that are eligible and the maximum amount that can be allocated for each asset in the event of a natural disaster. If the value of your assets surpasses the prescribed amount, you cannot claim part of the total with the government and the rest with your insurer.
With climate change, we can expect many more natural disasters. It is therefore very important to identify and protect yourself for all possible scenarios. Your broker remains your best ally when it comes to planning ahead and making sure you have peace of mind!