In it’s article in January, 2025, the Insurance Bureau of Canada, reports that 2024 was the costliest year for insured claims.
The torrential rains we experienced on July 16 brought home the importance of water coverage for homes and businesses, with Brampton, Mississauga and other parts of the Greater Toronto Area hit hard, resulting in flooded homes and water damaged property. With severe weather events becoming a more regular occurrence, there has been an increased awareness on what property insurance covers when it comes to water.
At McClelland Insurance, we always offer optional water coverage on property policies and make sure to discuss the benefits with customers to help them make the right decisions in protecting their homes. There are water coverage add-ons to property policies that come with an additional premium that is well worth the cost.
About water coverage
A standard property insurance policy only covers some types of water damage to your home or property such as the sudden and accidental overflow of water, for example a burst pipe, leaks from an appliance or a toilet overflowing. A standard policy doesn’t cover water damage due to sewer back-up or overland water.
What else does a property policy cover?
If you need to leave your home because it is unlivable due to damage caused by an insured event, or if you are under a mass evacuation order, your property insurance policy may have coverage to help with the costs of temporary accommodations and living expenses. This is called ‘Additional Living Expenses’ coverage on your insurance policy.
If you experience a power outage during an insured event, you may have coverage for food spoilage that covers a certain amount for the fridge, freezer and their contents.
Additional coverages may be available to purchase, depending on where you live
Sewer back-up coverage
This provides coverage for water damage to your home or property caused by the backup or escape of water or sewage from a sewer, septic system, or sump pump. An example of this is when the municipal sewage system caused sewer water to back-up into your basement, resulting in a flood that damaged your finished basement.
Tip: There are different amounts of coverage, also known as ‘limits of insurance’, available for sewer back-up. If you have a finished basement, it can be costly to repair – make sure that you have the appropriate amount of coverage to restore your home to its former state. Otherwise, you could be out-of-pocket not only for the repair, but also for the cost to replace the appliances, furniture and other items you had.
Overland water insurance
This provides coverage for loss or damage to your home or property caused by water that enters your property suddenly and accidentally due to the overflow of lakes and rivers, the sudden accumulation or run-off of surface waters such as torrential rain, and the sudden and accidental entrance of water through basement walls, foundation, or floor. An example of this is when torrential rains caused water to overflow and enter your home.
Tip: As with sewer back-up coverage, there are different limits of insurance available so make sure that you have the appropriate amount of coverage. Often, sewer back-up and overland water insurance need to be purchased together so that you get the best water coverage available today.
Protect your home from future flooding
If you’re worried about your basement flooding in the future, it’s a good idea to install a flood protection device such as a sump pump or backwater valve for added peace of mind. Some insurance companies provide a discount on premiums when a device is installed. And if you’ve had a sewer back-up or overland water claim, your policy may provide funds towards the installation of the device. Make sure you talk to your insurance broker to check if your policy has these features.
In addition, some municipalities offer subsidies to homeowners for the cost of the installation of these devices. Check these programs:
Want to learn more?
The CBC did a report on flood and insurance coverage with helpful information that you can watch here.
The Insurance Bureau of Canada has extensive resources about severe weather, climate change and your insurance coverage.
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The content on this page is for information only. The insurance products described are subject to terms, conditions, limitations and exclusions that are outlined in the policy wording. Please refer to the policy wording for complete details.