According to the Insurance Bureau of Canada, the new normal for annual weather-related damages to homes is $2 billion. When purchasing home insurance, most homeowners buy a standard home insurance policy, but these policies don’t always cover everything you think they do. Water damage is a common insurance claim and, depending on the cause and extent, may not be part of your policy.
Before you renew your home insurance policy, here are five reasons to look up what water damage you have coverage for and where you might need to add more.
Reason #1: You Don’t Know What Type of Coverage Is Available
Most insurers break down residential water damage coverage into three categories:
- Basic coverage: Offers protection for losses resulting from unforeseen events inside the home. This includes burst water pipes, overflowing bathtubs, and broken/leaky aquariums.
- Sewer backup and sump pump coverage: Offers protection for losses resulting from water backup or sewage from drains leading to sewers.
- Overland water coverage: Offers protection for loss or damage related to water entering a property from a sudden accumulation of water. This usually results from heavy rainfall, spring run-off or overflow from lakes or rivers.
There is a lot of information to take in, and navigating all options can be confusing. Insurance brokers can help you understand your insurance options and find the best fit for your circumstances, including explaining how water damage is or isn’t covered.
Reason #2: You Want to Know What Is Not Covered by Your Policy
While there is overlap in what insurers will cover in their policies, there are also common scenarios that are never covered by insurance. In terms of water damage, there are certain losses that will not be covered by your policy, regardless of the company you work with. These types of losses can include:
- Long-lasting seepage or leakage
- Rain or snow entering your home through an open window
- Your roof is leaking due to wear-and-tear
These types of events are easily preventable and are considered negligence on the part of the homeowner not to prevent or stop.
Reason #3: You Want to Understand What Is Covered by Your Policy
You might be more concerned about knowing what is covered by your policy before you add on the extra coverage. As long as your water damage is caused by an insurable event, the following categories are typically included in your insurance or a water damage additional policy.
Coverage for Personal Belongings
Your personal belongings, such as furniture, TVs, computers, clothes, sports equipment, and other personal items, are generally covered. While there are limits under the standard policy for items such as jewelry and collectibles, you can appraise their value and then purchase additional insurance.
Liability Protection
Suppose an injury of a third party happens on your property, or you cause injury or damage to another person or property. In that case, you may be exposed to a lawsuit. If water damage or a severe storm is the cause of those injuries, liability coverage helps you pay for any court costs and awards.
However, there are limits to liability coverage, so if you own a swimming pool, have household staff, or have parties often (all potential causes of water damage events), you are considered to be at higher risk. In this case, you may want to consider umbrella coverage for more protection.
Reason #4: You want to Know if Overland Water Coverage Is Part of Your Policy
Overland water coverage gives you the reassurance that your home will be covered during the following events:
- Rain accumulation on the surface that enters through your basement windows or a crack in an above-grade basement wall
- Rain accumulation on the surface that enters through your garage door
- Sewer backup due to heavy rain and surface water also entering the home
- Sewer backup due to the overflow of a body of freshwater or lake (oceans are not covered!)
Reason #5: You Want to Know if Utility Line Damage Is Covered
Sewer backup may be covered if you have overland water coverage in your home insurance policy. However, if you don’t, you may be surprised to learn that your insurance does not cover the cost of flooding inside your home due to a burst utility line or sewer line.
Pipes, sewer lines, electrical lines, or telecommunications lines that all sit within a homeowner’s property line are the direct responsibility of the homeowner. Unfortunately, if something goes wrong, you must pay to repair or replace broken pipes and cables.
Repairing and Replacing Utility Lines Is Expensive
You will want to check on your coverage for flooding due to broken pipes because the financial cost can be huge if you don’t have good coverage. If you do have coverage or the option to add on Utility Line Coverage, it can help you save money for the following reasons.
You Have To Pay For Excavation Costs
Usually, pipes are buried deep underground, and to fix or replace them, you need to dig certain areas of your property. This may include unearthing the landscaping or, worse still, using a jackhammer to drill through concrete or your home’s foundation.
Landscaping Costs to Fix Your Yard
Once the repairs are complete, you will need to restore your landscaping. Restoration may include repaving areas or replanting trees and shrubs.
You May Have To Move Out
In extreme cases, the flooding may be so severe that you have to move out of your home. As a result, you may have to pay hotel costs and incur additional living expenses.
Utility line insurance is the perfect solution for homeowners looking to protect their properties against damage due to broken utility lines.
Talk to Your Insurance Broker or Insurance Provider About Your Home Insurance Coverage
Even if you have some coverage for water damage, you may need more. Flooding can cause tens of thousands of dollars of damage to your property. If you don’t have adequate coverage, you will end up footing an extensive bill!
Get Your Edmonton Home Insurance Quote
At Cornerstone Insurance, we aim to make your life easier by understanding your situation, educating you on the options, and offering the best solutions for you. As your local insurance brokers, we offer a wide range of insurance for your home and business. Talk to an insurance broker about water damage coverage in Edmonton, St. Albert, Spruce Grove, and surrounding areas, and let us assess if your coverage level is right for you.
