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Water damage insurance

Water damage comes in many forms, including: a pipe bursts, filling your basement with water; a bathtub overflows, damaging the ceiling below; or, a dishwasher leaks, ruining your hardwood floors. Whatever form it takes, the resulting damage can be devastating. Today, water damage is the most common type of home insurance claim in Canada. Water damage claims amount to double that of fire and theft claims combined.

There are many steps you can take to prevent water damage. That said, the only way to financially protect your family and home against water damage is to buy water damage insurance. In Canada, most home insurance providers give you the option of adding water damage insurance to your policy. At Square One, our policies automatically include protection against most types of water damage. No paying extra. To learn more about water damage insurance, review the information provided below.

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Does home insurance cover water damage?

Most home insurance policies do provide some coverage for damage caused by water. However, it’s probably one of the most confusing coverages in any policy. And, the type and amount of coverage provided varies widely by provider.

If you have a comprehensive policy, which protects against all loss types except those specifically excluded, you might think you’re covered. That’s likely not the case. Most providers specifically exclude damage resulting from water. Some providers add limited water damage protection back in to the base policy. Other providers make you specifically add and pay for water damage protection.

Please note that insurance for damage caused by coastal flood, ground water, rising water tables, waves, tidal waves, or tsunamis is not widely available in Canada. As a result, the government has financial assistance programs in place. For example, in British Columbia there is the Disaster Financial Assistance Program. It’s also worth noting that some providers do no cover damage caused by inland flood.

At Square One, our comprehensive home insurance policy automatically includes protection against most types of water damage with very few exclusions. These exclusions are clearly listed under our water damage exclusions section. If you’d like, please use the button below to download sample policy wordings and review the water damage exclusions.

Download sample policy wordings

What does water damage insurance cover?

In a traditional policy, coverage is provided for damage caused by:

  • the sudden and accidental escape of water from a water main, plumbing system or hot water tank;
  • water entering your home as a result of an opening caused by an insured peril (for example, a tree falls on, and damages, your home’s roof in a storm letting in rain that damages the inside of your home); and
  • in some cases, the sudden entry of water due to melting ice or snow.

Often sewer backup is included, but with many providers you must specifically add and pay for this coverage. Even if sewer backup is covered, it may only cover the backing up of a sewer drain located inside your home. For example, there may be no coverage for damage resulting from an external drain that clogs and backs up, causing water to enter under your door.

As mentioned earlier, home insurance policies in Canada generally do not cover damage resulting from coastal floods, rising waters, tidal waves or tsunamis. Among other things, most policies also exclude damage caused by gradual, continuous or repeated seepage or leakage of water over a period of time. And, most policies will also exclude damage resulting from freezing and bursting pipes if you are away from your home during the usual heating season for more than 4 days (7 days at Square One) unless you:

  • make sure someone is checking your home daily to make sure heat is being maintained; or
  • turn off the water, and drain all the pipes in your home.

Water damage may not be covered at all if you have a rental, vacant or vacation property. Many providers have also introduced sub-limits for damage resulting from water or sewer backups. This makes it even more important to read your policy carefully, or speak to your insurance provider, to make sure you have the broadest protection available.

Square One automatically includes protection against most types of water damage, including sewer backup and inland flood, up to the limits selected, in virtually all of its home insurance policies.

How much does water damage insurance cost?

Depending on your home insurance provider, water damage insurance may be included in the base policy. Or you may need to specifically add and pay for water and sewer backup damage protection. If your provider requires you to add this protection, it may cost anywhere from $10 to $250 (or more) a year to get the broadest protection available.

Virtually all home insurance policies offered by Square One automatically include protection against most types of water damage, including sewer backup. No paying extra.

What is the deductible for water damage?

The deductible for water damage will most likely be the same as your standard policy deductible, which typically ranges from $500 to $5,000. Often a rental or vacation property has a separate water damage deductible that is higher than the standard policy deductible.

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