As British Columbia braces for heavy rainfall from an atmospheric river, the Insurance Bureau of Canada (IBC) has issued guidance for residents at risk of flooding – and for those already dealing with storm damage.
For brokers, the timing matters as much as the weather. Two of the most common sources of residential water damage in Canada – sewer backup and overland flooding – are not included in a standard home insurance policy. Both must be purchased as separate endorsements. When a client’s basement floods this week, whether the claim is covered depends entirely on decisions made at renewal.
The advisory, published November 9, 2026, sets out preparedness steps and coverage distinctions that frequently surface only after damage has occurred.
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Sewer backup coverage applies when water or sewage backs up through drains or plumbing. Overland flood coverage applies when rivers or other bodies of water overflow onto dry land. Neither is standard. Neither is automatic. And in areas designated as high-risk flood zones, overland flood cover may be unavailable or heavily restricted regardless of what a client is willing to pay.
Wind damage and interior water damage from a maintained roof are generally covered under standard policies. Coastal flooding and storm surge are not. Additional living expenses coverage may apply for displaced homeowners, but scope and duration vary by policy.
The take-up gap remains significant. According to IBC’s July 2026 report, The State of the Flood Insurance Market in Canada, household take-up for overland flood cover rose from 26% of Canadians in 2017 to 71% in 2023. That still leaves roughly three in 10 homeowners without it. Sewer backup is a separate product with its own take-up shortfall.
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BC has experienced this before. The November 2021 atmospheric river – the province’s costliest severe weather event on record – generated more than $675 million in insured damage, according to CatIQ data cited by IBC. A subsequent atmospheric river series in December 2025 caused approximately $90 million in insured losses nationally, with $74 million concentrated in the Fraser Valley.
The national picture reinforces the trend. Insured damage from severe weather across Canada exceeded $2.4 billion in 2025, making it the 10th costliest year on record, per CatIQ figures cited by IBC.
Access to overland flood coverage has improved sharply. IBC’s July 2026 report found that approximately 94% of residential properties in Canada are now eligible for the product – up from near-zero a decade ago – with more than 30 insurers currently offering some form of it, and 88% of policies priced at $300 or less annually. But roughly 850,000 homes remain ineligible, typically those in the highest-risk zones.
A federal backstop program, first committed to in 2019 and most recently targeted for an April 2026 launch, has not delivered a confirmed timeline, according to IBC. Until it does, the coverage conversation between broker and client remains the primary mechanism through which the gap gets closed – or doesn’t.
For clients already dealing with damage, IBC advises documenting losses through photos and written notes, contacting an insurer or broker promptly, and retaining receipts for cleanup and additional living expenses. Damaged items should be kept unless they present a health hazard.
For commercial policyholders, business interruption coverage is typically triggered by direct physical damage to the insured premises or to a neighbouring property that causes a closure. Brokers are encouraged to advise clients to confirm whether that threshold applies to their current situation.
IBC’s Consumer Information Centre is available at 1-844-2ask-IBC (1-844-227-5422) or at [email protected].
