In Canada, Spring brings green grass, flowers, and warm sunny days. It also brings melting snow, heavy rains, and flooding. Events such as the Calgary flooding of 2013 were a stark reminder that the risk of flood continues to worsen as weather patterns change across the country.
One important distinction to make is the difference between flooding, and ordinary water damage. While flood damage does involve water, it’s important to note that insurance deals with floods very differently than it deals with ordinary water losses. To be specific, “flood damage” means loss or damage caused by surface water originating from rain, snow, overflowing rivers, lakes, and other bodies of water. Under most home insurance policies, “water damage” does not include flood; “water damage” means sudden and accidental loss or damage caused by pipe breaks, failed water heaters, overflowing bathtubs or toilets, etc. – flood is not included in a home insurance policy’s basic water damage protection.
Historically, insurance for residential flooding has been almost impossible to find in Canada. One of the core reasons that flood insurance has been difficult to obtain is adverse selection: only the people who have a high risk of flood would purchase the insurance. Since the only people purchasing insurance would be the same people to draw heavily upon it when a flood occurs, the cost of this insurance would be impossibly high for these few customers to pay. However, as the weather continues to change and inland flooding becomes more common, many more homeowners and renters wish to purchase this coverage; as a result, it is now becoming possible to offer inland flood coverage because enough customers are interested to make the coverage affordable and sustainable.
Some providers, such as Square One, have started to offer inland flood protection for most policies in Canada; 94% of Canadian customers are eligible for this coverage.
Certain homes in very high-risk territories may still not be eligible for inland flood insurance coverage with private insurance providers. For those homeowners and renters, there are financial assistance programs in place; for example, in British Columbia there is the Disaster Financial Assistance Program. It is critically important to note that as of May 2015, the Disaster Financial Assistance Program has indicated that they may no longer provide assistance to individuals who could have purchased private flood insurance and either chose not to, or failed to make an effort to do so. This puts the onus on homeowners and renters in British Columbia to thoroughly research the options available to them, and to purchase private flood insurance if it is available for their home.
To help homeowners and renters find coverage that will protect them from inland flooding, Square One has created www.getfloodinsurance.ca. This website explains water damage and flooding in detail, and provides a summary of the different insurance providers in Canada who currently provide inland flood coverage for homeowners and renters. Customers who wish to learn more about inland flood insurance are encouraged to visit this website for more thorough information.
Most home insurance policies can provide broad protection against other types of water damage, including such losses as water backup, entry of water through an opening in the roof, burst water mains, and more. For more detailed information on water damage, visit our other resource article on that subject.
Hopefully, we’ll never need to use it, but earthquake insurance is an important coverage available throughout Canada. As we know, some areas are more likely to be hit by an earthquake than others, but as one occurs every 30 seconds, wouldn’t you rather be safe than sorry?
If you currently have home insurance, it’s important to be aware that most policies exclude damage caused by earthquakes. It is usually a rider which must be added to your policy for an additional premium, and with a separate deductible. However, depending on where you live, and the deductible you choose, earthquake insurance can be quite affordable. Square One Insurance includes earthquake coverage on all of its policies, so you never have to worry.
If you live in an earthquake zone, there are some things you can do to minimize the damage to your home, should a large quake occur:
This will help to withstand lateral and vertical earth movement. You may want to contact a professional to give you some tips, and help with the improvements. Listed are some of “Earthquake Canada” recommendations:
So they are less likely to be damaged, or cause injury, in a quake.
Contact a soil engineer, or a local building authority to check the type of soil on your property.
We all know it’s a good idea to have an earthquake kit on hand (and in your car if you can’t make it home) in the event of an emergency. Some items to include are:
Some other things to plan for:
If you live in an earthquake zone, and there are a few in Canada (not just BC), you must consider earthquake insurance. We all hope the “big one” doesn’t hit in our lifetime, but just in case, as mentioned above, there are many things you can do to prepare for an earthquake. Adding earthquake insurance to your home insurance policy is one of the things you can do to be prepared.
Traditional home insurance policies don’t include loss or damage caused by earthquakes; rather, you must specifically request that it be added to your policy. There will be an additional cost to add this coverage. Earthquake insurance typically has its own limit of insurance as well as a separate deductible, which is usually higher than the base deductible.
While earthquake insurance can be pricey for those who own houses, Square One recommends it always be purchased on primary residences. It’s simply not worth the risk of going without earthquake insurance. The cost varies depending on where you live, and the risk of an earthquake occurring, as well as the amount of coverage required, and the deductible selected. For those renting their homes, or living in apartments or condos, earthquake insurance usually ranges from $5 to $50 per year. At Square One, our home insurance policies automatically cover loss or damage caused by earthquakes. No paying extra.
Some people have little to no confidence that home insurance companies will be able to pay covered claims resulting from a major event. The reality is that numerous earthquakes and other disasters occur around the world each year. Insurance companies factor earthquakes into their prices, building reserves to pay for resulting claims. Some of the other things that help ensure insurance companies can meet their commitments:
Earthquake insurance covers loss or damage caused by the tremor or shaking from an earthquake. It does not cover loss or damage caused by landslides, snowslides or other forms of earth movement. Nor does it cover loss or damage caused by tsunamis or tidal waves, even if the tsunami or tidal wave was due to an earthquake.
If you own a house, your earthquake insurance will typically cover loss or damage to your building and your personal property. Make sure you also carry “Additional Living Expense” coverage on your policy, so it can cover any additional living expenses you incur if you’re unable to live in your home while it’s being repaired after an earthquake.
If you own a condo, your condo (or strata) corporation is responsible to insure the building. But to cover your personal property and additional living expenses, your individual condo policy must include earthquake insurance. It may also cover assessments made against you because of a shortfall in your condo corporation’s insurance.
And if you rent your home, earthquake insurance on your tenant policy will typically cover your personal property and additional living expenses.
Hopefully we’ll never need to use it, but earthquake insurance is an important coverage available throughout Canada. Some areas are more likely to be hit by an earthquake than others, but as an earthquake occurs every 30 seconds, wouldn’t you rather be safe than sorry?
If you currently have home insurance, it’s important to be aware that most policies exclude damage caused by earthquakes. Earthquake coverage is usually available as an optional addition which must be purchased for an additional premium, and with a separate deductible. Depending on where you live, and on the deductible you choose, earthquake insurance can be quite affordable. While many insurance providers won’t add earthquake coverage unless you ask for it, Square One Insurance includes earthquake protection on all of its Canadian policies, so you never have to worry.
Condo owners should take special note: if you live in a condo building that suffers damage in an earthquake, each unit owner may be assessed a portion of the building’s deductible. On your condo unit owner’s policy, you can purchase coverage to protect you in just such a case. However, it will only protect you if the loss is one that is covered on your condo policy. So if you don’t carry earthquake insurance on your contents, your policy will not respond to cover any assessment due to an earthquake.
If you live in an earthquake zone, and there are a few in Canada (not just BC), you must consider earthquake insurance. We all hope the “big one” doesn’t hit in our lifetime, but just in case, there are many things you can do to prepare for an earthquake. Adding earthquake insurance to your home insurance policy is one of the things you can do to be prepared.
For earthquake information, including what to do during an earthquake, go to the Government of Canada’s website: Earthquakes in Canada. And, if you’d like to learn more about earthquakes across Canada, feel free to read this in-depth article from www.insurancejournal.com.
To learn more about earthquake insurance, visit Square One’s earthquake insurance page. For more information on inland flood coverage or to get a quote on your home insurance, contact Square One at 1.855.331.6933.
Even when you take precautions, accidents can happen. Home insurance is one way to protect your family against financial losses from accidents. And, home insurance can start from as little as $12/month.