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Surveyed Canadians uninformed about flood damage protection: Square One


February 22, 2016   by Canadian Underwriter


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Two-thirds of those taking part in a recent poll by Vancouver-based Square One Insurance Services Inc. incorrectly believe flood protection is included in home insurance policies.

Homeowners not informed about flood coverage

The survey of 1,500 Canadians shows that 65% of those surveyed think flood protection is included in home insurance policies, notes a statement Monday from Square One, which offers personalized home insurance policies in British Columbia, Alberta, Saskatchewan, Manitoba and Ontario.

The misperception exists across the country – with many respondents being unaware of the current state of flood protection in Canada – but was most widely held in Manitoba and least widely held in Saskatchewan.

“Water damage is the leading cause of insurance claims in Canada, but most home insurance policies specifically exclude flood damage,” says Square One president Daniel Mirkovic.

Although “Canada is the only developed country in the world where flood insurance has not been generally available,” Mirkovic points out, the company statement reports the insurance industry has responded and started to change, particularly following the severe flooding in southern Alberta and in and around Toronto in 2013.
“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,” notes the statement. [click on image to enlarge]

Percentage of individuals who wrongfully believe home insurance protects against flood damage, per Canadian province

Square One reports that this protection starts at $4 per month for eligible homeowners and $2 per month for eligible renters.  Although each policy differs, the company notes, 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.

Policies typically do not cover damage caused by gradual, continuous or repeated seepage, Square One points out.

The insurer hopes to enhance understanding of residential flood insurance through the newly launched www.getfloodinsurance.ca, which provides information on, among other things, the differences between overland flood, sewer back-up, and water damage.

Related: Most Canadians not aware of common home insurance condition that could result in a denied claim: Square One Insurance