A weekend of flash flooding on Montreal's West Island – the latest in a run of soakings that have also hit Manitoba and Toronto this month – has left homeowners facing a question many assumed was settled: whether their insurance covers any of it.
Near-stationary thunderstorms dumped 100 to 170 millimetres of rain on parts of southern Quebec on Saturday, flooding hundreds of homes and cutting power to some 20,000 residences, according to CBC; for some West Island residents it was the fourth flood in nine years. Earlier in the month, about 255 millimetres fell on Stonewall, Manitoba, in roughly seven hours, leaving some Interlake producers with losses in the hundreds of thousands and prompting the province to activate disaster financial assistance. In Toronto, a flood warning was lifted on June 18 after more than 70 millimetres closed roads, including a ramp on the Don Valley Parkway.
Flooding is Canada's most common and most expensive natural disaster, according to the Insurance Bureau of Canada, and insured losses from flood and water-related events have climbed more than 350% over the past two decades.
The confusion is predictable, said Matt Hands, vice-president of insurance at Ratehub.ca, because most homeowners misunderstand what a standard policy covers until a flood forces the question.
"A lot of people assume that they're covered when they have home insurance," Hands said. "People just assume you buy insurance, you're covered for everything."
That gap in understanding turns up in the data. An Allstate Canada survey found only 42% of Canadians could correctly identify two coverage options without also selecting incorrect ones.
A standard policy does respond to some water damage, but not the kind that arrives from outside.
"There is some coverage with your standard policy, but it doesn't cover things like floods," Hands said. The standard coverage is built for sudden internal failures, such as a burst pipe or an overflowing washing machine, rather than water coming from outside, he added.
Overland flooding and sewer backup are treated differently, he said, and have to be added as separate endorsements. The line that decides a claim is not whether water got into the house, but how.
The same logic works against homeowners when water builds up gradually rather than arriving all at once.
"You could have a dripping pipe, and if there's water damage that comes from a dripping pipe, that's not covered," Hands said. Insurers will treat that kind of slow damage as a maintenance issue the homeowner should have caught, and decline it.
The pattern is familiar. After spring flooding hit the Sudbury area in May, CBC reported, residents were urged to review policies, with the IBC noting that standard coverage excludes overland flooding and sewer backup.
Coverage is also uneven by geography. In areas insurers consider high-risk, flood protection can be capped, loaded with steep deductibles or declined outright. But Hands said a refusal from one carrier is not the final word.
"Don't assume because your carrier says no that all carriers say no," he said.
Part of the exposure is behavioural. Many homeowners decline the coverage outright, Hands said, because the sticker shock of repairing a basement often only registers after the damage is done – by which point they have already decided they did not need it.
Even buying the coverage is no guarantee of being made whole. Hands said homeowners who set their limits years ago can find them far short of today's repair costs: on a basement that runs $45,000 to fix against $25,000 of overland water coverage, the carrier pays out its limit and leaves the homeowner to fund the remaining $20,000.
The remedy is keeping coverage amounts current with the cost of rebuilding, he said.
"Materials cost more today than they did five, 10 years ago," Hands said.
That kind of review rarely happens. An Allstate Canada survey found only 40% of Canadians ranked reviewing their home insurance policy among their top three preferred household tasks.
"Some people set it and forget it and don't always read their documentation," Hands said.
His advice is plain.
"I always say at least once a year," Hands said. "And the best time most people do it is at their renewal."
For homeowners already dealing with water in the house, Hands said the priority is keeping a thorough record of everything affected.
"Document, document everything," Hands said. "The more documentation you have, the more information you can provide, the better the claims experience is going to be."
