On February 19, 2015 Canadianunderwriter.ca reported that Aviva Canada will start to offer homeowners an overland water protection endorsement (flood insurance) insuring losses arising from the accumulation or run off of surface waters. This bold announcement will make Aviva the only insurance company in Canada to offer this type of coverage. The coverage will be available in the provinces of Ontario and Alberta, and only if your current policy already has sewer back-up coverage in place.
But will everyone be eligible for this coverage? Or will it be unaffordable or not available to high risk flood areas where the coverage is needed the most? According to a Globe and Mail interview with the president of Aviva Canada, Sharon Ludlow, only 5% of the home in Canada are deemed to high risk for this coverage. “Aviva used the improved flood maps developed in recent years as well as other technology to identify and categorize the risk of water damage to homes across Canada. The insurer then categorized the dwellings in one of four risk levels. By this measure, about 95 per cent of the country is insurable. Still, 5 per cent of the country is categorized as very high risk and cannot be provided coverage. Ms. Ludlow said Aviva is working with governments to explore options for these outstanding homes.”
High risk areas that come to mind would be Highland Creek in Toronto and downtown Calgary, which took the biggest hit for overland flood damage in recent years, or perhaps more locally certain areas of Port Franks that have an issue in spring break up. Those areas, and more like them actually consist of roughly 300,000 homes in Canada – people sure love to live in flood planes. These homes, the ones who need this coverage the most, will not have access to this coverage and may have to prepare for these disasters with 100% of the risk. To prepare for floods, you should:
- Avoid building in floodplains unless you elevate and reinforce your home – first and foremost.
- Elevate the furnace, water heater and electric panel in your home if you’re at high risk.
- Consider installing check valves and water sensors to monitor and prevent sewer back-ups.
- Install a sump pump and have it battery or generator backed up in case the power goes out.
- Construct barriers to stop floodwater from entering the building
- Waterproof your foundation by sealing all cracks with a waterproofing compound, divert all downspouts away from your home, and install a french drain or “Big-O” around the perimeter of your home at its footings.
Regardless if you are in a high risk flood area or not, the recent flood losses in Canada should be a wake up call to you. Like it or not our country is getting more rain every year, 12% more in the last 60 years to be exact. According to Environment Canada, extreme weather patterns that were supposed to occur every 40 years are now happening every sixth year. The environment is changing, and with it so should the insurance industry and they way we build infrastructure. More insurers should join along with Aviva or Canada should implement and national insurance initiative.