In June 2013, Calgary experienced the worst flood in Alberta’s history. The total cost was over $5 billion dollars in property damage, giving it the dubious distinction of being the costliest natural disaster in Canadian history.
The event also redefined Canadian flood protection, including insurance.
Prior to the flood, Canada was the only country in the group of G8 economies that didn’t offer overland protection. And the flooding problem only appears to be getting worse.
Overland flooding in Canada is the most expensive natural disaster. According to the Insurance Bureau of Canada (IBC), the average damage from severe weather in 2008-2009 was $300 million. That number has jumped to around $400 million in recent years.
According to the Canadian federal government, urban flooding in the decade between 2003 and 2012 resulted in over $20 billion in damage.
What homeowners should know
You don’t have to live near a body of water to be at risk of flooding. If the city’s sewage system becomes backed up, they can overflow and begin draining into residential basements. The average cost to repair a flooded basement in a major city is $42,000.
If the flood is caused by the sudden and accidental bursting of a plumbing pipe, a standard homeowners policy will typically cover this. When it comes to sewage backup and overland flooding, however, it is a different story.
To protect your property and belongings, homeowners should be aware of the two major types of insurance against flooding.
- Regular flood insurance. This type of insurance has been available to Canadians for many years, but it isn’t always automatically included in a homeowners policy. This standard flood insurance protects your home from sewer backups.
- Overland flood insurance. This is the more recent type of insurance, introduced after the Calgary flood of 2013. This type of insurance covers damage which occurs when bodies of water -- rivers, lakes, etc -- overflow onto dry land.
It’s always best to review your insurance options with your broker to ensure that you have the right flood insurance coverage in place.
