Water Damage & Insurance: What will my insurance cover?

To understand what water damage is covered by your insurance, it is important to understand the distinction between the different types of water damage coverage that are available in a personal property insurance policy.

Here are some common definitions of the different types of water coverage:  

Water Escape Coverage: Provides coverage when an internal plumbing line or fixture, or appliance suddenly ruptures and water leaks into your home causing damage. It also covers the accidental escape or overflow of water from a domestic water container (ex. a sink or bathtub) including heating, sprinkler, air conditioning or plumbing systems. This is a standard coverage in most home, rental, and condo insurance policies.

Water Infiltration Coverage: Provides coverage when water enters your home through an opening created suddenly and accidentally by another insured peril (ex. shingles blown off your roof in a storm allowing water to enter your home). This is also a standard coverage in most home, rental, and condo insurance policies.

Sewer Backup Coverage: Provides coverage if water backs-up and flows into your home from your municipal sewer system, private septic system or through sump pump failure. This is an optional coverage available for most home, rental, and condo insurance policies.

Ground Water Coverage: Provides coverage when water enters your home suddenly and accidentally through the foundation or basement wall or through the floor. This is an optional coverage only available from some insurance companies.

Water and Sewer Lines Coverage: If you experience a leak, break, tear rupture or collapse of a water and/or sewer line on your property that causes damage to your home, this coverage will pay up to the specified limit to repair or replace water and/or sewer line. This is an optional coverage only available from some insurance companies.

Overland Water Coverage: Provides coverage for damage resulting from the overflow of a lake or river, or from heavy rain or rapid snow-melt that enters your home from a point at or above ground level. This is an optional coverage only available from some insurance companies.

Is Flood Insurance the same Overland Water Insurance?

Not exactly. Flood Insurance has long been available in Canada but historically was only available as an option on commercial property insurance policies. It was originally intended to cover coastal flooding from salt water but today some insurers define it as “the breaking out or overflow of any body of water whether natural or man-made and includes waves, tidal waves and tsunamis.”

Overland Water Insurance, as noted above, is different in that it was designed to cover damage resulting from the overflow of a lake or river, as well as from heavy rain or rapid snow-melt that enters your home from a point at or above ground level. This coverage is a relatively new concept in Canada when it comes to personal lines insurance.

What should you look for?

Remember, not all insurance policies are the same and there are different coverage options available.

Close attention should be paid to the limit of insurance provided for each type of water damage coverage in your policy because they are often different.

Another important factor to consider are the exclusions in your policy which are often overlooked and can vary between companies. A few typical exclusions applicable to water damage claims include damage caused by wear and tear; slow leaks or seepage; mold; and water damage caused by freezing while you are away from your home for a set period of time as defined by your insurance company.

Unfortunately, many people don’t realize until after they experience water damage that their current policy may not include all types of water damage coverage or that their coverage limits may be less than what they thought.

If you have a loss, don’t delay in reporting it to your insurance company.

Check out the resources available on our disaster portal for more information about flooding.

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