Oakville Real Estate News

Understanding Your Insurance Policy

Blog by Joette Fielding | August 9th, 2013

Understanding Your Insurance PolicyUnderstand what your home insurance policy covers before disaster strikes

Following June’s flooding in Alberta and Toronto’s recent 100+ mm rainfall and subsequent flooding,  many insurance policy holders are now concerned about how a record rainfall, flooding or sewer backup will affect them and whether their current or future home insurance policy will cover such damage.

There are different causes and different types of flooding in a home.  It is important to understand exactly what your own home and property insurance policy covers. It’s also important to be aware of the distinction in an insurance policy between water damage and flooding. 

Water damage due to issues such as a burst pipe, a leak in your roof or a broken water heater are covered under most policies.  Some policies may have the option of adding additional coverage for an additional fee to cover for sewer backups and the corresponding cleanup. Cleanup after a sewer backup is especially important due to the contamination and mould issues that can result from this type of damage if it is not dealt with immediately and effectively.

Overland flooding, such as that from an excessive rainfall or a river overflowing its banks, is very likely not covered under a standard policy. 

Some water damage riders or extension policies may cover a range of expenses in an official flood. Additional living expenses if you’re forced to flee your home and even spoiled food in the fridge and freezer from power outages can often be covered in these extension policies.

Review your homeowner’s policy and discuss your coverage in detail with your insurance broker. Be aware that if you are in a high-risk area, such as on a flood plain or near a lake or river, you will pay higher premiums and deductibles than those in less susceptible areas. Unfortunately  some residents in the GTA and surrounding areas, have discovered the hard way that that they are not covered for flood damage, or that their deductibles are too high to make a claim worthwhile, so review your policy thoroughly and make any necessary revisions to protect you and your belongings.

As with so many things related with homeownership, it is critical that you read carefully and understand your documents.  You should discuss your home insurance policy needs with your insurance broker before a disaster occurs and you actually need the insurance.

The Fielding Team

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