Square One finds 65% of Canadians wrongfully believe that home insurance protects against flood damage
A recent survey of 1,500 Canadians, conducted by Square One, has found that 65% incorrectly believe that flood protection is included in home insurance policies. As shown in the attached graph, this misconception was most widely held in Manitoba and least widely held in Saskatchewan.
“We found that many Canadians across the country are unaware of the current state of flood protection in Canada,” says Daniel Mirkovic, President at Square One. “Water damage is the leading cause of insurance claims in Canada but most home insurance policies specifically exclude flood damage. Canada is the only developed country in the world where flood insurance has not been generally available.”
Until recently, Canadians that suffered flood damage had to rely on the Disaster Financial Assistance (DFA) programs provided by the federal, provincial and territorial governments. The 2013 floods in Alberta and Ontario caused $5.3 billion in damages, of which $3 billion was insured. Those having to rely on the DFA programs discovered that, even with the financial assistance received, they were out of pocket tens of thousands of dollars.
Recognizing that Canadians could be better protected, the insurance industry has started to change. Industry associations are working with the government to improve flood mapping and mitigation efforts. Five home insurance providers now offer some form of protection against freshwater flooding. With four of these five, protection is optional for eligible homeowners. The final provider automaticallyincludes this protection in policies of all eligible homeowners and renters.
Although each policy differs, most offer protection against damage resulting from the covering of dry land by freshwater or wastewater that:
- Has escaped or been released from the normal confines of a lake, river, stream, natural watercourse, reservoir, canal or dam; or
- Is generated by snowmelt or rainfall that cannot be dispersed by soil absorption, runoff and drainage.
The cost of this protection starts at $4/month for eligible homeowners and $2/month for eligible renters. It’s worth noting that most policies are not covering damage caused by coastal flood (or any type of seawater), ground water or rising of the water table. Policies also do not typically cover damage caused by gradual, continuous or repeated seepage.
Anticipating increased interest in flood insurance, Square One has launched www.getfloodinsurance.ca. This website is designed to help explain residential flood insurance. Visitors will learn about the differences between overland flood, sewer backup, and water damage. They’ll also learn about the approaches taken around the world and the options available in Canada. With content being updated constantly, the website aims to become the leading authority on residential flood insurance in Canada.
Those looking for flood protection are encouraged to visit www.getfloodinsurance.ca, speak with their insurance providers, or call Square One at 1.855.331.6933.
Established in 2011 and based in Vancouver, British Columbia, Square One offers the only home insurance policy in Canada that can be personalized to your unique needs. That means you only pay for the protection you need. Square One is also one of the few providers to automatically include earthquake, sewer backup and inland flood protection in its policies. Square One currently servesBritish Columbia, Alberta, Saskatchewan, Manitoba and Ontario. For more information about Square One, or to get an online quote, visit www.squareoneinsurance.ca.
SOURCE Square One Insurance Services Inc.