March 21, 2014

Water Damage & Sewer Back-up

Water Damage & Sewer Back-up

by Cathy Cornhill, Director of Operations, Personal Lines

Whether we want to acknowledge it or not, global warming and extreme weather patterns are expected to have an increased impact on our world in the next decade.  Rarely a week goes by that we don’t read in the newspaper or hear on the news of a weather related catastrophe somewhere on our planet.   Here in Canada in the past 12 months we have experienced major flooding in Alberta, rainstorms in Toronto heavy enough to turn the subways into underground rivers, and one of the snowiest and coldest winters in the past 20 years.  Unfortunately, these weather anomalies are not just news stories,  they are expected to have a significant impact on how much we will be paying for property insurance in the next few years and will affect what amount of protection we can expect our property policies to provide in the future.

Most insurers in Ontario are currently reviewing and amending their limits and coverage for sewer back-up and water-escape.  Insurers are starting to ask more questions as to what preventative measures a homeowner has taken such as installing a backwater valve or a battery back up sump pump and some companies are offering policy discounts associated with these measures. Some insurance companies are also applying higher deductibles to water damage claims.  These changes by insurance companies make this a good time to review your own policy sewer back-up limits and deductibles, assess your individual needs and discuss these in consultation with your broker.

If your basement is unfinished you may not need your full policy limits to apply in the event of a sewer back-up claim.  However, if you have renovated that man-cave into a media room with high-end finishes, electronics and furniture, you will want to discuss this with your broker to make sure that you have adequate insurance on your home and that your sewer back-up limit is high enough to cover the potential loss to the building and its contents should you experience a water claim.

If you live on the upper floors of a high-rise you may think that you don’t really need coverage for sewer back-up or water escape.  However, you should consider that most policy wordings include the backup of water from a drain in their definition of sewer back-up and so damage caused by a drain may not be covered under a standard policy.  For the minimal cost of a few extra dollars per month, you can have peace of mind by adding sewer back-up to your tenants policy.

Water can cause significant damage to your home and personal property.  It has surpassed fire as the leading cause of personal property claims.   We can all take measures to try and prevent water claims, but should a claim occur, it is essential that adequate coverage is in place. As your trusted insurance advisor we look forward to discussing your questions and concerns on this topic.