Three Weeks After St. Catharines Floods, Sewer-Backup Coverage Is the Line Homeowners Should Check Now

Here is the gap in one line. You are not uninsured. You are insured against a different water event than the one that happened.

Canadian home policies do cover sudden and accidental water damage from inside the home — a burst pipe, a failed washing machine hose, a hot water tank that lets go. What they exclude is water arriving from the municipal system. The Insurance Bureau of Canada states that damage caused by the backing up of sewers and drains "is typically not covered by a standard policy," and that optional sewer backup is offered by most insurers.

The federal consumer regulator draws the same boundary. The Financial Consumer Agency of Canada lists floods and sewer backup among the perils home insurance typically does not cover, grouping them with earthquakes and landslides rather than with the burst-pipe scenarios most people picture.

So the protection exists. It is simply opt-in, and a great many homeowners have never been walked through the distinction. The word "flood" in ordinary speech covers every way water gets into a basement. The word "flood" on a policy document covers considerably less.

Your declarations page is the summary document at the front of your policy package — the one listing your address, your limits, and your add-ons. Sewer-backup protection appears there as an endorsement. If you are not sure whether you carry it, PolicyMe notes that this is exactly where it would be listed. Three lines are worth locating.

Does the endorsement appear at all. This is binary and takes about a minute to answer. Either sewer backup is named among your endorsements or it is not.

What its sublimit is. This is the line that surprises people. A sewer-backup endorsement typically carries its own coverage limit, separate from your dwelling limit and often dramatically smaller. As one Ontario brokerage puts the mechanic, if your sewer backup limit is $25,000, "that may be the total available for that sewer backup loss, even if your dwelling, contents, and additional living expense limits are much higher." A separate deductible commonly applies to that same claim.

Then compare the number you find against what the work actually costs. Public Safety Canada puts the average cost of repairing a flooded basement at over $40,000, and notes that floods account for roughly half of all home insurance claims in this country. A sublimit set well below that figure is not protection so much as a partial refund.

Whether overland water is listed separately. Carrying one endorsement does not mean you carry the other, and a single storm can trigger both pathways at once.

Anne Marie Thomas, director of consumer and industry relations at the Insurance Bureau of Canada, made the same point to the St. Catharines Standard in the weeks after the flooding: "Check your policy before a disaster strikes to make sure that you have the coverage that you need." She also noted how recent this product category is, observing that until roughly fifteen years ago flood coverage could not be bought in Canada at all.

If you would rather have the conversation than read the paperwork, the questions worth putting to a broker are narrow and answerable:

• What types of water damage does my policy actually cover?
• Is sewer backup included, and is overland water included?
• What limits and deductibles apply specifically to each?
• Are service lines, such as underground water and sewer pipes, covered?

The same sublimit problem surfaced after this summer's Ontario storms elsewhere, as our coverage of North Bay's flash flooding and sewer backup sub-limit gaps set out.