Does Your Home Have Flood Insurance?

Flooding is the most common type of natural disaster in Canada, so you aren’t facing this challenge alone. Many homeowners live in flood-prone areas.

Homeowners and renters insurance typically doesn’t cover flood damage. You’ll need to purchase a separate flood policy. Flood victims sometimes qualify for emergency relief, but insurance provides the best protection.

If you live in a flood zone, your mortgage lender may require you to obtain flood insurance. Typically, that coverage must equal at least what you owe on your mortgage and meet certain legal requirements.

What does flood insurance cover?

The Insurance Bureau of Canada (IBC) notes that flood insurance only covers certain types of water damage, such as:

• The overflow of lakes, ponds and rivers
• Surface water from flash rains and snowmelts
• Groundwater that enters a home through windows, doors and walls

In Canada, no two policies are the same. Some carriers offer flood insurance as an add-on to your existing home insurance policy, while others issue it as a stand-alone policy. If you are a homeowner, flood insurance will cover your dwelling and personal property.

If you are a renter and lease a property in a high-risk area, your landlord likely carries a policy on the building. However, your landlord’s policy won’t cover your belongings. You should still purchase contents coverage to protect your things.

Assessing your risk

FloodSmart Canada’s website lists flood maps by province and territory. A flood map can help assess your flood risk. Even if you live in a zone with moderate or low risk of flooding, you may still need to take precautions.

You will need to determine how much damage a flood would cause, based on the size of your home and the depth of the water. You may be surprised at the results. According to Public Safety Canada, the average cost to repair a flooded basement is $40,000.

A handful of insurers provide flood coverage in Canada. Your insurance broker can show you the types of coverage available for your property.

The cost of flood insurance

The cost and availability of flood insurance vary greatly depending on your flood risk, but the cost of being insured is a lot less than having to rebuild out of pocket.

IBC says most policyholders pay between $100 to $300 a year for their coverage, while those in higher-risk areas pay between $500 and $1,000 a year.

Consider these factors when discussing rates:

• Have you elevated your home? Homes that are 3 feet or more above the base flood elevation may save on premiums.
• Have you floodproofed your home? Even if it’s not possible to elevate your home, there are still measures you can take to make your dwelling more flood resistant. Consider raising the utilities, installing basement infill and flood openings and placing valuable contents above flood levels. These measures can reduce your premiums.

Speak to your insurance broker about flood insurance. They can help you better understand your risk and how to protect against flooding. With severe weather and natural disasters on the rise, you owe it to yourself and your family to be prepared. Having adequate flood coverage is a smart first step.