I discovered water damage in my home. Will insurance cover me?

Q: My washing machine has been leaking for years and we only just learned of the leak and the resulting damage because of staining on our basement ceiling below. Will my home insurance cover this?
–Alison

A: While water damage is almost always the same—destroyed floors, mouldy drywall, and potentially destroyed electrical and heating systems—the cause can significantly change whether or not the damage is covered by your insurance.

Turns out, how water enters your home dictates whether or not the damage will be paid by you, out of pocket, or covered by your home insurance policy.

This should cause all homeowners concern. Why? Because flooding happens so frequently. Setting aside the incidental floods, such as pipes breaking or washing machines leaking, natural floods, such as those caused by snowmelt runoff or raised river banks, occur fives times as often as wildfires. In fact, natural overland floods are the second most frequent natural disaster in Canada, according to Dan Sandink, director of research at the Institute of Catastrophic Loss Reduction (ICLR).

Sadly, residents in Ontario, Quebec and New Brunswick are now intimately aware of how devastating a flood can be to both property as well as to someone’s financial well-being. In April 2019, CTV News calculated that 6,425 homes had been flooded in Quebec alone. Another 3,508 were surrounded by water. Another 21 Ottawa homes were voluntarily evacuated, while 80 roads in New Brunswick had been closed.

According to Canadian Forces, 2,000 troops were deployed to Eastern Canada to help with flood efforts, and more than one million sandbags were used in the nation’s capital, Ottawa.

This doesn’t bode well for homeowners across Canada, who will eventually feel the burden of rising premiums to cover insured losses. This is on top of the $1.9 billion in insured losses that Canadians already sustained in 2018—the fourth-highest amount on record, according to the Insurance Bureau of Canada.

What’s worse is knowing that a standard homeowners’ policy (or tenant insurance) doesn’t provide coverage in the event of flood damage. While government relief may be available for uninsurable damage, that relief is often slow to materialize and insufficient to cover the cost of repair, leaving families to pick up the pieces.

Source: https://bit.ly/3lm9t3r