Home Insurance – Protect Your Major Asset

This has been a tough winter with record snowfalls in many Canadian cities.  We can’t wait for spring to arrive, right?  But once the weather warms up and the snow starts melting, plus the normal spring showers, there’s an increased risk of flooding in your basement.

Our former home flooded twice.  We really had no idea what our insurance coverage was when we woke up to three feet of water in our basement.  Our neighbour told us insurance doesn’t cover “that sort of thing.”  Fortunately, we were indeed covered by a “water rider” and the drywall, flooring, furniture and other contents were replaced.  Meanwhile, our disgruntled neighbour was on the hook for his costly reno.

Check your home insurance policy

A standard home insurance policy protects you against a sudden release of water in your home (like a burst pipe, for example).  But, unless you take optional coverage, you will likely not be covered for “overland flooding” or water seepage into your home – and you don’t need to live close to a river or lake to be at risk.

Make sure you read the fine print. Sign up for sewer-backup and overland flood insurance if you don’t have it already.  Find out if there’s a cap on the amount of damage covered.  You don’t want to find out you have no (or too little) coverage after disaster has struck.

How much coverage do you need?

Your policy needs to provide you with the funds to rebuild your home or repair its structure if it gets damaged.  This is not the same as the market value of your home.

You want to get “guaranteed replacement cost” to cover the cost of rebuilding or repairing your home no matter what the amount and replacing the contents up to a set amount.

Prepare for the thaw

Here are some things you can do to reduce the chances of water in your basement:

  • Make sure there’s no ice build up or piles of snow obstructing the flow of water away from your property.
  • Install a plastic cover above your window well.
  • Check that your downspout hasn’t become disconnected and ensure water is discharged  away from your house.
  • Install a sump-pump and have a battery backup.
  • You might need a backwater valve, which prevents flooding from sewer backup.

It’s also useful to take inventory of your basement.  It’s hard to remember all the items tucked away in storage, or what exactly you have on your shelves or cabinets.  If your things are damaged, you have to account for everything that’s disposed of that you will want to replace.  For months after our flood I’d be saying, “What happened to my …….?”  when I’d need something that I hadn’t noticed got tossed away.

Some things, of course, can’t be replaced.  Move anything that’s one-of-a-kind or sentimental to higher shelves or covered plastic bins.

The bottom line

Water damage is included in some home insurance policies, but it’s an extra “rider” in others.  I know it’s not riveting reading, but it is worth your while to check the fine print in your policy to make sure you are covered. 

If you’re not, you might want to start getting quotes from insurers now.

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