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Water, water, everywhere

How to prepare for the unexpected (and unwanted) from an insurance perspective

Let’s face it: there are no good situations when it comes to having damage on a house that requires submitting a claim for insurance.

That said, water damage in the home can be one of the most impactful of claims, and not just because having water outside of where it’s supposed to be can be messy, inconvenient and costly.

We’re talking about things like a sewer backing up, flooding (typically. not necessarily limited to, a home’s basement) and, of course, the impact of burst pipes.

Remember, gravity does its job and when it comes to water, that often means the basement or ground floor of your home.

But let’s dive in (pardon the pun).

In a world where extreme weather events seem to be an increasingly common occurrence, damage starting with a “B” (as in billion) seems to be the new normal for annual catastrophic losses, most of it due to water-related damage.

Remember, gravity does its job and when it comes to water, that often means the basement or ground floor of your home.

There are things that a homeowner or even someone who’s renting can do to prepare for water-related damage.

Aside from might seem that you avoid storing important documents in the basement and installing a sump pump (typically a requirement for an insurance policy), the Insurance Bureau of Canada (IBC) has four suggestions:

The first is to keep a current and detailed home inventory list.

Second on the list is to take precautions throughout your home and property, especially if your neighbourhood is prone to flooding.

Assembling a disaster safety kit is the third recommendation the IBC makes.

Their final suggestion is to create a 72-hour emergency preparedness plan.

Clearly, the idea when it comes to understanding what type of coverage you have when it comes to water damage is to check NOW, not after a disaster occurs.

Let’s start with some of the obvious questions, one being whether damage to your home caused by the sudden and accidental bursting of plumbing pipes and appliances is covered by a home insurance policy.

The answer is “yes, usually” but you should contact the firm that you bought your insurance policy from to be sure.

Typically, at least historically, a home insurance policy in Canada has not covered loss or damage caused by overland flood damage, defined as waterways such as rivers that flow onto dry land.

But now some insurance providers are beginning to offer this coverage. It’s not universal so if you have questions about whether your policy includes overland flood damage, ask, don’t assume, especially if where you live is known to have regular instances of flooding.

What about water damage caused by sewer backup?

The same answer applies: check with your insurance provider to make sure you have what you are expecting or requiring in the policy. Remember to ask about what deductible limit you have on water damages, as well as if you have a specific limit on your policy.

Also typically part of a home insurance policy is damage caused by hail or wind, including damage caused by flying debris or falling branches or trees and water entering through a sudden opening caused by wind or hail.

Another category of water-related damage is known as “Comprehensive” or “All-Perils” coverage. You’ll want to know if you have this type of coverage on your auto policy (not your home) but this coverage is not typically mandatory, so make sure you check.

Finally, your coverage should include the reimbursement of “additional living expenses” (ALE) but again, you should check with your insurance provider to understand what coverage you have purchased.

If you see a pattern developing here, it’s “check, don’t assume” and it applies to most issues involving insurance, and certainly policies that involve water damage.

The industry LOVES questions but having someone ask after something bad happens and expecting an answer that is favourable to your circumstances isn’t something that you want to assume with an reliability.

That’s especially true when it comes to damage caused by water getting to places it was never intended.

Barry Hogan is president of Hub International, an insurance broker with offices in Sarnia-Lambton. Hub International has offices throughout Ontario and can be found on the web at www.hubinternational.com.

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