Update your flood insurance now, say industry experts

As Toronto residents face property damage following a severe rainstorm earlier this month, insurance experts are recommending homeowners and renters consider flood protection now as precipitation rates are predicted to increase due to climate change.

"You don't have to live beside a lake in order for you to have a flood," said Anne Marie Thomas, director of consumer and industry relations with the Insurance Bureau of Canada (IBC).

She said the bureau saw reports of water coming into people's homes via window wells due to the sheer amount of flooding on July 16.

"It can really happen to anyone," she said.

Thomas and several other insurance experts say that flood-related insurance is not yet standard in homeowner policies. That's why they say it's important to advocate for your needs to a broker, and be aware of the limits insurance companies place on claims in order to be prepared.

The Canadian insurance industry is expecting to see nationwide claims increase from $2.1 billion annually in 2020 to $5 billion annually by 2030 due to climate change, according to a 2020 report by the Insurance Institute of Canada, a non-profit.

"What people should do now is make sure you have that coverage on your policy," said Thomas.

Limits to flooding coverage

It's too early to estimate how much Toronto's most recent storm has cost in insurance claims, said Thomas. However, she predicts the scope is similar to the city's 2013 storm, which resulted in $1 billion insured losses.

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As Toronto residents assess the damage from recent heavy flooding, it's crucial to understand what their insurance policies cover.

Not all water damage coverage is the same with every insurance company or within individual policies, she said.

"Some companies may have a certain amount that they will only pay, maybe they say 'we're not going to pay more than $25,000 for any one sewer back-up claim,'" Thomas said.

That's why she recommends people speak to an insurance professional and advocate for themselves. "Think about things like how much, what's the value of the possessions that you have in your basement," she said.

Different types of insurance coverage

Insurance may not be available for every property. The IBC estimates about 10 per cent of all homes in Canada are uninsurable due to high risk of repeated flooding.

That means residents need to pay close attention to their needs, said Daniel Ivans, an insurance broker with Ratesdotca.

"It's quite common for insurance companies to either not offer some of these coverages or otherwise cap them," he said.

There are multiple core types of coverage, Ivans said, which include sewage back-up and overland flooding, which is caused by the overflow of water from a lake or river.

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Several residents in the Rockcliffe neighbourhood in Toronto's west-end say they are dealing with thousands of dollars worth of property damage following flooding on July 16.

But there's also surface water flooding which comes from heavy rainfall, Ivans said.

Groundwater flooding from the rising of the water table beneath the earth is another type of insurance he suggested people consider.

Ivans said people should also be aware that insurance providers are increasing their premiums due to the increased frequency of extreme weather.

"The warnings have been there for decades but now, not only are consumers seeing it directly in person with rainfalls and forest fires, but also obviously in their pocketbooks," he said.

Ivans recommends shopping around with multiple providers for the best rates and also considering investing in flood mitigation efforts, to prevent incidents or reduce damage.

How to protect your home in advance

Implementing ways to prevent flooding can be easy and cost-effective, said Jim Mandeville, the senior vice president of First Onsite, a disaster recovery company in Toronto.

Even if insurance covers your damage, he said the emotional toll of dealing with the flooding in the first place can be prevented.

Mandeville said people should walk around their property and see if there are any low spots up against the building. If there are, look into building up the land so the water pools away from the house, he said.

Many homes are already equipped with sump pumps, which move water from a basement to the outside. He said ensure one is installed, and if you have one, get a plumber to examine it to determine if it's sufficient you may need a second one.

In the past few years, Mandeville said he's noticed the severity of home flooding dozens of his clients around the GTAhave experienced has been on the rise. He said he's seen flooding, on average, go from about 10 to 12 cm of water in a basement, to a metre of water.

No matter how extreme the flooding is, Mandeville said always put yourself first above your property.

"Do not just go running in the water," he said.

"Potentially there are electrical hazards, and that water is contaminated in some form or other. Take a moment, consider your personal safety."