Is insurance available for water damage?

Written by the Square One team

Reviewed by Rena Novotny

Updated June 18, 2024 | Published January 14, 2012

In Canada, we have to take the weather as it comes. It’s impossible to accurately predict what’s going to happen next, but when rain hits, it sometimes hits much harder than expected.

Rainstorms are continuing to increase in frequency and severity, causing damage to homes and personal property. This leads to claims for water that enters homes during a sudden downpour, often due to backups from drainage systems and eavestroughs.

Let’s take a look at insurance for water damage, including what’s usually covered and what’s usually not.

Water flooding into a home

The important points

  • In insurance, water damage is divided into many different loss types, ranging from overland flooding to burst pipes.
  • Home insurance covers some forms of water damage, but not others.
  • Sudden and accidental pipe bursting is usually covered, but gradual water damage over time is generally not.

The typical approach: home insurance and water damage

Water damage is one of the leading causes of home insurance claims in Canada.

But it’s important to note that “water damage” is a broad term that actually covers several different loss events. Some of these events are often covered by insurance, while others are almost never covered.

On the one hand, there’s water damage from home systems—backed-up toilets, busted pipes, and other sources of damage from inside the house. Many forms of water damage in this category are covered under certain circumstances:

  • Water damage caused by sudden and accidental bursting of pipes is usually covered.
  • Water damage arising from frozen pipes may not be covered.
  • Sewer backups are normally not covered by default, but many insurance providers allow the policyholder to add coverage for additional cost.

On the other hand, we have water damage caused by natural events, like floods.

Insurance companies generally divide flooding into two categories: inland (a.k.a. overland) and coastal.

  • Inland flooding occurs when freshwater from lakes or rivers overflows onto land that is normally dry. Heavy rain or snowmelt are the usual causes of inland flooding. In the past, home insurance in Canada did not cover inland flooding. Fortunately, such coverage is more commonly available now (more on that in the next section).

  • Coastal flooding occurs when saltwater (the ocean) overflows onto dry land. Coastal flooding is the result of unusual high tides, storm surges, and tsunamis. Home insurance coverage for coastal flooding is extremely rare. If your home is damaged by coastal floodwaters, you would likely have to turn to the Government of Canada’s Disaster Financial Assistance Arrangements for financial aid.

There’s one other important thing to note when it comes to water damage insurance.

One form of water damage often begets another, and an insurer will usually look at the root cause of flooding when they decide whether it’s covered or not. For example, inland flooding events often cause sewer backups. In such cases, the insurer would likely deem the water backup damage as having been caused by an inland flood, and that coverage (or exclusion) would apply.

How does Square One cover water damage?

From extreme weather events to leakly plumbing, we’ve seen the myriad ways that water can damage a home.

Homeowners, condo owners and renters are all exposed to the possibility of water damage, so it’s important to prepare for the unexpected by purchasing a comprehensive home insurance policy that includes coverage for many forms of water damage.

At Square One our policies include some of the broadest water protection available in Canada. Instead of leaving out coverage for water escape and sewer backup, we build this into every Canadian policy that we sell. We even go a step further by providing inland flood coverage; 94% of Canadian customers qualify for inland flood protection. When you purchase insurance from Square One, you can rest assured that common causes of water damage are already included in your policy.

How can I protect my home against water damage?

Water damage can very quickly become a serious problem. It can take ages to repair and often causes significant disruption to your life in the process. Even if you have insurance coverage for water damage, you can save yourself a lot of disruption and hassle by taking steps to address a number of the most common causes of water damage:

  • Keep your outdoor eavestroughs (roof gutters) and drainage systems clean and clear of leaves, debris and animal nests. Even partial blockages can cause water to quickly accumulate and back up into your home during heavy rainfall, causing significant damage in a very short period of time.

  • Direct downspouts 3 metres away from your home, and slope your yard away from the foundation. Heavy rainfall needs an easy pathway to flow away from your home. Without proper downspouts and slopes, water will accumulate and begin to enter your home’s lower levels.

  • If necessary, install a sump pump. Some homes need extra active protection from ground and surface water infiltration. In these cases, sump pumps are an additional line of defense against water damage. Make sure your sump pump has a battery or generator backup to keep it running in the event of a power interruption, and test it at least once every year to ensure it remains in working order.

  • Install a backwater valve on your home’s sewer line. Homes often suffer water backup damage as a result of aging municipal infrastructure. As you can imagine, water backups cause serious contamination and are very unpleasant to deal with. A backwater valve (also called backflow valve or sewer backup valve) is a device that automatically closes your home’s sewer line if water begins to flow the wrong way, protecting your home from damage.

  • Whenever possible, use braided steel hoses to connect your appliances to your home’s water supply. Standard rubber hoses deteriorate over time, eventually bursting and causing severe damage. For example, an average washing machine supply line will release 650 gallons of water per hour. If your washing machine hose were to burst while you were away for an hour, you would get home to the equivalent of 8 bathtubs of water saturating and destroying your walls, flooring, ceilings and personal items.

  • Be extremely careful when supplying fridges with water. The narrow plastic water lines commonly used to supply fridges are fragile and renowned for failure, often within only a few years of installation. Fridge line breaks are a frequent cause of water damage claims to home insurance providers.

  • Check your windows and doors for worn seals, and maintain and re-caulk them as needed. Doors and windows are a core element of your home’s protection against wind-driven rain. Old, dried and cracked seals or caulking can allow this water to infiltrate your home and cause damage.

  • Seal cracks in your foundation walls and basement floor. Most home insurance policies still exclude water damage caused by ground water infiltration through your foundation walls and basement floor. In the event of a heavy rainfall, groundwater levels can rise quickly and create pressure on your basement, eventually allowing water to enter your home through cracks and fissures.

  • During the winter, shut off and drain all plumbing lines that pass through an unheated portion of your dwelling, and all lines that deliver water to the outside. Many home insurance policies exclude losses resulting from freezing that occurs during the coldest seasons, so it’s important that you shut off these lines in order to prevent damage.

  • Find the location of your home’s main shutoff valve. If a pipe or fixture in your house begins to unleash a flood, every second will count. Knowing where your home’s shutoff valve is will allow you to quickly limit the amount of damage that your home suffers, which will help you to recover from the loss in a shorter period of time.

Water can cause significant, stressful damage to your home; fortunately, you can protect yourself by combining a strong, comprehensive home insurance policy with reasonable measures to prevent water damage.

Want to learn more? Visit our Home Insurance Basics resource centre for dozens of helpful articles to guide you through the ins and outs of home insurance. Or, get an online quote in under 5 minutes and find out how affordable personalized home insurance can be.

About the expert: Rena Novotny

Rena's 23-year career started as an independent adjuster where she specialized in complex property, liability and special risk loss. As a branch manager, Rena hired, trained, mentored and coached several adjusters. She continues part-time post-graduate studies in neuro-psychology and traumatization, learning how both may impact the insured's engagement on catastrophic claims. Rena has a MA (Conflict Analysis and Management), CRM, CIP, and holds a level 3 adjusting license.


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