Do You Need Flood Insurance?

Snow melt, heavy rain and overflowing rivers can all result in unwanted surprise repairs to your home. Do you know which type of water damage is covered by your home insurance?

It may surprise you that not all types of water damage are covered under a basic home insurance policy. There are certain types of water damage that need to be added to your policy to provide coverage, and others that are simply uninsurable.

Under a basic policy, the main thing to remember with regard to water damage is that it needs to be "sudden and accidental". Insurance is not meant to be a maintenance contract for your home, but to assist with unforeseen circumstances. For example, if your basement floods due to an unexpected burst watermain, your hot water tank, or pipes, the resulting damage to your home and belongings could be claimed under your home insurance. Review the specific details of your insurance policy with your broker to understand what could be covered and what may not be covered.

Over the years, insurance companies have developed additional options to cover other types of water damage. Ask your broker what the insurance company offers for your specific situation. Typically, the following types of water damage can be added on for an additional cost to your policy:

• Sewer Back-up – Usually specific to water entering your home through the sewer system, septic, or even eavestrough or downspouts. This coverage may be automatically included in the basic package offered by your insurance company; check the details with your broker. 
• Overland Water or Flood – Sometimes specifically detailed around freshwater bodies due to heavy rainfall or snow melt. For example, if you live near a river that overflows its banks and the water damages your home.
• Ground Water – Some insurance companies list this separately, while others include it with overland water coverage. This is specific to water entering your home at or below ground level through walls, foundations or floors.

One important thing to note is that salt water or tsunami coverage is not normally included or available for residential policies.

When choosing a company and broker for your home insurance, find one that will review the specific details around water coverage for your policy so that both you and your broker fully understand what the options are and where the gaps may be!

Home insurance is a key requirement for your mortgage. The Auxilium Team is happy to provide you with a referral to our trusted partners for a consultation and quote.

Auxilium Mortgage Corporation is based in Victoria, BC and works with clients locally and across Canada. The Auxilium team has over 100 years of combined financial experience and access to dozens of lenders to help you meet your goals.