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FLOOD INSURANCE

Coverage for sewer backup and overland flooding is not automatically included in most property insurance policies, such as your home insurance. These, however, may be offered as optional coverages that you can purchase. To be eligible for overland flood insurance, some insurance companies will require you to also purchase sewer backup coverage — or the coverages may be bundled together in one product.

Do I really need flood insurance?

Many consumers believe that the government will cover their losses in the event of a flood, and therefore decide not to purchase private overland flood insurance coverage. But there are important limitations to the Provincial Disaster Assistance Program (PDAP) that all Saskatchewan property owners should consider.

Will PDAP pay for flood damages?

PDAP is not a substitute for private insurance, nor does it provide full compensation. Instead, it offers assistance for uninsurable losses of essential goods and to return property to its pre-disaster condition only, with specific limits on the amount of maximum assistance that can be paid.

What types of things will PDAP not cover?

Consumers who suffer a loss are often unprepared for the limitations of what PDAP will and — more importantly — will not cover. Keep in mind the program is only meant to cover essential items.  For instance, air conditioners are generally not covered unless there is an extenuating medical need. Other items such as docks, RVs, boats, jewelry, artwork, antiques, and other recreational equipment are not eligible either.

Depreciation is also applied. This means if you purchase new items to replace items you've lost, without the right private insurance coverage, you'll need to pay the difference out-of-pocket — particularly if you cannot find a similar used item in a comparable condition.

The basics of private water insurance

Insurance for water damage is usually broken out into three distinct components for most insurance companies:

Basic coverage: Offers protection for losses that result from unforeseen events inside the property, such as burst pipes, leaking toilet tanks, broken aquariums, and overflowing bathtubs. This is included in most home insurance policies.

Sewer backup coverage: Offers protection for losses that are caused by water backup or sewage from drains. This generally is not included in most basic policies and must be purchased as an add-on endorsement.

Overland water coverage: Offers protection for loss or damage related to water entering a property from a sudden accumulation of water. This usually results from a heavy rainfall, rapid snowmelt, or overflow from lakes or rivers. Again, this is not usually included in standard insurance and must be purchased separately.

What is not covered by flood insurance?

In landlocked Saskatchewan, we don't need to worry about coastal flooding, which is excluded from the majority of insurance policies. But there are other limitations to watch out for, such as long-lasting seepage, rain or snow entering through an open window, roof leaking due to wear-and-tear, as well as water entry due to grading issues that have not been reasonably corrected.

How much does overland flood coverage cost?

The short answer is it depends. If you live at the top of a hill, chances are overland flood insurance will cost less than if you live at the bottom of that hill in a low-lying plain, which is susceptible to flooding. There are also variances in deductibles and coverage limits that influence the price paid by the customer.

 

Some high-risk areas may be excluded from eligibility altogether — although approximately nine in 10 Saskatchewan homes have access to coverage at varying price points. Roughly two-thirds of policies sold today on detached, single-family homes cost less than $25 per month, while more than 80% cost less than $500 annually.

 

Talk to your insurance broker for a no-obligation quote.

Keep a detailed home inventory

It is important to keep up-to-date records to document your belongings in the unfortunate event of a claim. The Insurance Bureau of Canada has developed a helpful home inventory spreadsheet (Microsoft Excel format) to help you track your belongings.

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