Overland Water Coverage in Ontario

Flooding can happen at any time of the year – not just in the spring – and it can be devastating.

According to the Insurance Bureau of Canada, 2024 was the worst year on record for damage caused by severe weather events, with flooding being a significant factor. The report cites an estimated $1.1 billion in damages from flooding in Ontario in July & August 2024. Get to know more about flood insurance, what it is, how it may help you, and why it’s imperative if you live in the province of Ontario.

You can also choose to discuss with Excalibur Insurance directly. Give us a call.

Call us direct at 1-888-298-7343

Home Insurance & Flood Coverages: What You Need to Know

All home insurance policies are insured against basic water damage losses. Basic water damage coverage included with your home insurance policy covers you for water-related losses such as:

• Your hot water tank suddenly and accidentally leaking;
• Overflow of water from your dishwasher, washing machine, or bathtub;
• Ice damming that causes your roof to leak; and
• Water from an above ground pool entering through your basement windows.

Sewer or Septic Backup coverage protects you against losses occurring due to your sewer or septic system backing up into your home. These losses commonly occur during periods of heavy rainfall, when the sewer system is no longer able to handle the excess water, causing it to back up into your home. Backup water generally emerges from your plumbing and can cause significant damage to your basement or the lower levels of your home. When the Sewer Backup Endorsement is added to your policy, it insures losses such as:

• Sewer backup due to heavy rain;
• Sewer backup due to a clogged line;
• Septic tank backup; and
• Sump pump malfunction causing the pit to overflow.

Sewer backup does not cover losses created by floods or exterior drains, which requires Overland Water Coverage.

Previously, it was only ever possible to purchase Overland Water Coverage and Flood Insurance as separate purchases. Now, many standard policies will include these automatically, given the critical nature of including these protection packages.

As for what those coverages are, read on for more information:

Overland Water Coverage or “Flood Insurance”

Overland Water Coverage is a relatively new offering, designed to protect against damage caused when above groundwater enters a home through the foundation, basement floors or walls, or through a sewer line. It covers damage caused by freshwater floods, such as the overflow of a river, lake, or other body of water. The sudden and accidental accumulation of water due to heavy rainfall is also covered, which is a weather event that Canadians are quickly becoming familiar with. Overland Water Coverage insures against losses such as:

• Rain accumulation on the surface that  enters through basement windows or a crack in an above grade basement wall;
• Rain accumulation on the surface and entering through the 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!);
• Accidental dam break.

Not all homes are eligible for Overland Water Coverage. If you live in an area that is considered to be a high-risk flood zone, it is not likely to be available. Major risk factors include:

• Driveways that slope downward toward the house; and
• Dwellings within 100 meters of a river or other flowing body of water.

There is generally a cost to adding Overland Water Coverage to your policy, which can vary widely between different insurers. The cost will depend on the location of your home, the limit of coverage, and the deductible that you choose. The monthly cost could be anywhere from $10 to $30. Your broker is the best person to advise you as to what coverages are available and how to make the coverages as cost-effective for your family as possible. You must already carry Sewer Backup coverage to be eligible to add Overland Water Coverage. It is not a stand-alone coverage.

Ground Water Coverage

In addition to Overland Flood Coverage, companies are beginning to offer Ground Water Coverage. Ground Water Coverage protects against water damage from underground natural sources such as basement walls, foundations, and floors (as long as the loss is sudden and accidental). Ground Water Coverage can cover losses such as:

• Rainwater entering through a crack below grade on a basement wall;
• Rainwater enters through the basement floor; and
• Water damage caused by the rising of the water table and septic tank backup.

Water & Sewer Line Coverage

In some cases, Water and Sewer Line Coverage is available to cover losses if you experience a leak, break, tear, rupture, or collapse of a water or sewer line.

What is NOT covered by Overland Water Coverage?

Certain water-damage losses are NEVER covered by your policy. These types of losses can include:

•  Sewer Backup: Damage caused by the overflow of water or sewage from drains, sewers, or septic systems is usually excluded from overland water coverage. This type of damage typically requires a separate “sewer backup” endorsement.
• Groundwater Seepage: Water that seeps into your home gradually through the foundation, walls, or floors (not due to a sudden event like a river overflowing) is generally not covered by overland water coverage.
• Water Damage from Internal Sources: Damage resulting from burst pipes, leaking appliances (like dishwashers or washing machines), or overflowing bathtubs/sinks is typically covered under the basic home insurance policy, not specifically under overland water coverage.
• Preventable Damage Due to Negligence: If the water damage is a result of poor maintenance or negligence (e.g., failing to repair a known leak), your claim might be denied.
• Certain Geographic Areas: In areas deemed at very high risk of flooding, overland water coverage might be unavailable or have very specific conditions and higher premiums.
• Coastal Flooding/Tidal Surges: Standard overland water coverage usually pertains to freshwater flooding. Damage from saltwater flooding or tidal surges might require specialized coverage if available.
• Damage that Started Before Coverage Was Purchased: If the water damage began before you purchased overland water coverage, it will likely not be covered.

How much does overland water coverage cost? 

The cost of overland water coverage in Ontario is not fixed and can vary significantly based on several factors. It’s important to understand that adding this coverage will likely increase your overall home insurance premium. Here are some of the key elements that influence the cost:

• Location and Flood Risk: This is the most significant factor. If your property is located in an area identified as having a higher risk of flooding (e.g., near rivers, lakes, or in low-lying areas), the premium for overland water coverage will likely be higher. Insurance companies assess flood risk based on historical data, geographical features, and flood maps.
• Home Value and Coverage Limits: The amount of coverage you choose (i.e., the maximum amount your policy will pay out for a covered loss) will impact the premium. Higher coverage limits generally mean higher costs. The overall value of your home and its contents also plays a role in determining appropriate coverage limits.
• Deductible: The deductible is the amount you will have to pay out-of-pocket before your insurance coverage kicks in. Choosing a higher deductible will typically result in a lower premium, but you’ll have to pay more if you make a claim.
• Insurance Provider: Different insurance companies have their own underwriting guidelines and pricing models. It’s always a good idea to get quotes from multiple insurers to compare the cost of overland water coverage.
• Your Insurance History: Your past claims history can also influence your insurance premiums.
• Other Policy Features and Bundling: If you bundle your home and auto insurance with the same provider, you might be eligible for discounts that could offset some of the cost of adding overland water coverage.

What Can I Do to Prevent Sewer Backup and Overland Water Losses?

Not all water damage is preventable, but much of it is. There are a few ways you can reduce your odds of being impacted by water loss, such as the following:

• Ensure that your downspouts discharge away from your home’s foundation;
• Make sure that your sump work is working correctly. Also, consider adding a battery backup for it in case it needs to work hard during a power outage;
• Clean your eaves troughs regularly; and
• Install a backwater valve (some cities/municipalities offer rebates on this preventative measure, check with your city hall or municipal office to see if this is available for you).

If you have been instructed by your local or provincial emergency officials to evacuate, you should do so immediately. If you are currently indoors, disconnect all your electrical appliances, ensure your cellphone is safely charged, and ensure that any necessary personal items (like important documents and medications) are secure and easily accessible. Never eat food or drink water that has come into contact with flood waters!

If you are outdoors and your property is being impacted by flooding, ensure that you leave the area immediately if you know that your electricity is on. Follow your emergency plan and find a safe area on higher ground. Avoid travelling by roads near water, ravines, low laying areas, bodies of water, bridges, embankments, etc. Never drive through, walk through, or stand in any moving water. If you need to walk, use a stick to check the sturdiness of the ground in front of you, and always account for all of your family members. Never let children or pets near floodwaters.

What about insurance? How do you know if you’ll have coverage in the event of a water loss? Well, there’s a few ways. Follow these tips once you are safe and away from danger.

• Complete your annual home insurance review with your Excalibur Insurance Account Manager. At Excalibur, we reach out to EVERY CLIENT at the time of their renewal to ensure that homeowners are aware of the coverage they have and any coverage they may be lacking.
• Read your policy! Boring, we know – but useful nonetheless. If you require a copy of your actual policy wording (the part that generally comes after the fancy first page), please contact the office, and we would be happy to send you a copy.
• Tell us if you make changes! Install a battery backup for your sump pump? Bite the bullet and install a backwater valve? These changes are important to us and, in some cases, can lower your premiums.

You can always discuss with Excalibur Insurance Group directly if you are unsure about your eligibility for water damage coverage.

Water Loss Resources from Excalibur Insurance Group:

Some of our favourite insurers and other governing bodies have put together some great resources on water damage protection. Check out the websites below for more information:

• Aviva Insurance: http://avivawaterprotection.ca/
• Intact Insurance: https://www.intact.ca/on/en/personal-insurance/home/water-damage-coverage/overland-water.html
• Insurance Bureau of Canada: http://www.ibc.ca/qc/disaster/water
• Flood Insurance Canada http://floodinsurance.ca
• How to create an emergency preparedness kit for you and your family: ca/page/be-prepared-emergency
• Check out Ontario’s Surface Water Monitoring Centre here: https://www.ontario.ca/page/surface-water-monitoring-centre
• Note that your local municipality is responsible for on-the-ground flood responses. Be sure to contact your local municipality office with regards to flood response in your area.

Want more information regarding flood insurance, water damage and home insurance, or more specific answers based on your personal circumstances?

Call us direct at 1-888-298-7343