With flooding affecting several parts of the country over the week, the Insurance Bureau of Canada (IBC) recently revealed that only a small fraction of Canadians have overland flood insurance coverage.
Without the add-on, homeowners will have to foot at least part of the repair and restoration costs of their flooded properties. The average insurance cost of a flooded basement in a major urban center comes in at around $42,000, according to Feltmate.
IBC vice-president of federal affairs Craig Stewart said that only 10%-15% of homeowners in the country have the insurance add-on, based on the bureau’s estimates. Stewart explained that the scarcity of consumers with the coverage is likely because the add-on was a fairly new product that was not available prior to 2013, when severe flooding affected Toronto and Alberta.
“That was primarily because we did not have flood risk maps developed for the whole country,” Stewart told The Canadian Press. “The insurance industry needs to be able to quantify the risks so they can assess which premiums to charge which people. Up until then there was simply no risk mapping done to be able to support such policies.”
Stewart also added that the low uptake of overland flood insurance might be because most Canadians only interact with their insurance broker whenever it is time to renew their policies.
“Most people are not aware that overland flood insurance is available,” he said. “Therefore, unless they have been directly in a conversation with their broker or their agent at the time of renewal over the past year, they likely won’t have it.”
READ MORE - Have you prepared your home in case of flood or water damage?
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