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Homeowners Still in the Dark on Water Damage Insurance: Survey

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It’s every homeowner’s worst nightmare: water seeping up from the basement floor, or bubbling beneath the paint on the ceiling. As climate-related storms increase in frequency and ferocity, water damage will only grow as a top concern (and cost) — but new data finds a good chunk of Canadians don’t know if they’re covered against it.

A survey from BNN Bloobmerg and RATESDOTCA (conducted by Leger) found that 32% of homeowners don’t know “that standard home insurance policies don’t cover water damage from seepage, overland flooding, or sewer backup.”

While home insurance policies do generally cover water-related mishaps such as burst pipes or malfunctioning appliances, it’s the big weather-related floods that cost the big bucks; but they’re generally not included under standard policies. Insurance companies have increasingly offered these products in recent years — but that doesn’t mean homeowners are taking out those policies. According to the survey, half of respondents said they don’t have additional water insurance coverage.

As well, only 13% said they had “seepage coverage” in their home insurance policy, which would protect against overland flooding — when water pours in from the outside as a result of a street flooding or an overrun river.

And these types of floods are becoming all the more common. Case in point is Hurricane Fiona, which pummeled Atlantic Canada in late September, and caused $660M in insured damages, according to the Insurance Bureau of Canada — the most costly extreme weather event in the region.

READ: $660M In Damages: Fiona is Costliest Weather Event Recorded in Atlantic Canada

The storm wreaked havoc, tearing up trees, and even sweeping some housing into the ocean. However, the IBC notes, many damaged properties were located in floodplains or high-risk flood areas where residential coverage isn’t available, with the government to step in to provide homeowners with disaster cost relief.

Nova Scotia, which saw a large number of buildings damaged by fallen trees, extensive flooding, and torn-off roofs, accounted for the majority of insured damage, with an estimated $385M. PEI saw over $220M in insured damages as houses were moved off of their foundations by storm surge.

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