Overland flooding and water damage
With climate change come a number of challenges including how to handle water based damage to homes.
Flood- what is it?
It may seem readily apparent but a flood occurs when a river, lake or ocean rises above its usual containment area. A sudden water escape in your home may seem like a flood to you, but it is not covered by an insurance policy as such. It is covered under the water damage portion of your policy. To insurance companies, there is a big difference between the two. There was also an exclusion for damages caused by water entering a residence through doors and windows. But if the water came from within the home through ruptured plumbing it was covered (usually) as long as it wasn't related to poor maintenance.
Recent changes to flood availability and coverage
In an effort to improve and clarify how a residential policy will respond in the event of water damage, insurers are offering new products that cover the risk of overland flooding. This is welcome news to the residential sector whereas in the commercial sector, coverage for the risk of flood has been available for a long time. Some insurers are offering flood coverage with varying pricing depending where residence is located. Others are combining sewer back up with flood as a package. This could be an optional coverage or one that is included in the basic policy premium, depending on the insurer.
The bottom line is that this will help cover some grey areas as to where the water damage originated from and give customers a better sense of security in their insurance coverage.
Going forward
As these coverages become more available it is important for customers to understand how each insurer treat this exposure since no company will respond in the same manner in the event of claim.
As the weather continues to change and seasonal meltwater presents itself in varying degrees of intensity, we as brokers, will be watching to see how effectively these new products and combination of coverages respond to future water based damage claims.
Not sure what your policy offers? Contact us.
