Flood Insurance in Canada

Published: June 1, 2015

Updated: May 15, 2018

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The Alberta flooding in June 2013 was the costliest disaster in Canadian history, costing the province an estimated $5 billion and the insurance industry an estimated $1.7 billion. The Greater Toronto Area floods of the same year cost the city an estimated $850 million.

However, until very recently, insurance companies have not offered coverage for this type of natural disaster, despite the fact that it’s by far the most frequent type of natural disaster in the country.

Flooding By the Numbers

According to a report that surveyed Canadian before the 2013 floods, about 70 per cent of Canadians believed they were covered for water entering the home through doors or windows, when in reality, they weren’t. While insurance companies offered coverage for water entering the home through sewer backup (possibly resulting from a flood), water entering the home through other channels was not.

Before Aviva Canada announced in February 2015 that it would be offering a first-of-its-kind overland water coverage, Canada was the only G8 country that didn’t offer residential flood insurance coverage.

There were several problems holding insurers back. For homeowners living in high-risk areas (floodplains), the cost to insure their home against the risk could be prohibitively expensive. Furthermore, a $50 million federal flood-mapping plan, begun in the 1970s, was stopped in 1992 due to budget cuts, so most flood maps were out of date.

New Options for Canadian Flood Insurance

Now, after updating these flood plain maps, Aviva Canada has come up with a viable solution to the problem, as they’re the first Canadian property and casualty insurance company to offer overland water coverage to residential homeowners.

The coverage is part of a three-pronged approach to protect against losses as a result of water entering the home through doors or windows. The base product, protection for events like burst pipes, is still a basic type of coverage offered on homes.

The two optional endorsements, sewer backup and now overland water, round out Aviva’s plan to protect homeowners from most flooding events. The only things that remain excluded are saltwater floods, tidal waves,

Aviva says that currently, 94 per cent of its customers would be eligible to add the coverage (as long as they also have sewer backup), and it would be affordable for most. Exclusions exist for customers living in extremely high-risk flood areas as well as with homes that have a driveway sloping towards the home.

For more information about Aviva’s water protection package, be sure to visit http://www.avivawaterprotection.ca/.