“I discovered water damage in my home. Will insurance cover me?”
The short answer, unfortunately, is “that depends.” Here are the variables that come into play when homeowners seek water damage protection.
Q: My washing machine has been leaking for years and we only just learned of the leak and the resulting damage because of staining on our basement ceiling below. Will my home insurance cover this?
–Alison
A: While water damage is almost always the same—destroyed floors, mouldy drywall, and potentially destroyed electrical and heating systems—the cause can significantly change whether or not the damage is covered by your insurance.
Turns out, how water enters your home dictates whether or not the damage will be paid by you, out of pocket, or covered by your home insurance policy.
This should cause all homeowners concern. Why? Because flooding happens so frequently. Setting aside the incidental floods, such as pipes breaking or washing machines leaking, natural floods, such as those caused by snowmelt runoff or raised river banks, occur fives times as often as wildfires. In fact, natural overland floods are the second most frequent natural disaster in Canada, according to Dan Sandink, director of research at the Institute of Catastrophic Loss Reduction (ICLR).
Sadly, residents in Ontario, Quebec and New Brunswick are now intimately aware of how devastating a flood can be to both property as well as to someone’s financial well-being. In April 2019, CTV Newscalculated that 6,425 homes had been flooded in Quebec alone. Another 3,508 were surrounded by water. Another 21 Ottawa homes were voluntarily evacuated, while 80 roads in New Brunswick had been closed.
According to Canadian Forces, 2,000 troops were deployed to Eastern Canada to help with flood efforts, and more than one million sandbags were used in the nation’s capital, Ottawa.
This doesn’t bode well for homeowners across Canada, who will eventually feel the burden of rising premiums to cover insured losses. This is on top of the $1.9 billion in insured losses that Canadians already sustained in 2018—the fourth-highest amount on record, according to the Insurance Bureau of Canada.
What’s worse is knowing that a standard homeowners’ policy (or tenant insurance) doesn’t provide coverage in the event of flood damage. While government relief may be available for uninsurable damage, that relief is often slow to materialize and insufficient to cover the cost of repair, leaving families to pick up the pieces.
You may be able to purchase flood insurance—known as overland coverage—depending on whether or not you live in a flood-prone zone. And even if it is available in your area, however, you must also purchase sewer back-up coverage, which is typically far more available.
But what about floods that are not caused by natural disasters? What about the floods caused by burst pipes or cracked foundations or, in your case, Alison, a leaky washing machine?
In general, standard (also known as comprehensive) homeowners’ insurance may help cover damage caused by leaking plumbing if the leak is sudden and accidental, such as if a washing machine supply hose suddenly breaks or a pipe bursts. Keep in mind, this sudden, accidental flood cannot occur when the home is vacant for more than 48 hours (for some insurance providers this drops to 24 hours), which is why it’s important to have a trusted friend or family member check on your home every day or so to make sure everything is alright while you are away on vacation.
But what about slow leaks? Turns out this is where coverage gets grey and fuzzy. While most policies won’t cover damage resulting from poor maintenance—for instance, damage due to a leaking toilet you failed to repair— that doesn’t mean that all slow leaks are denied coverage.
What follows will help you understand when you’re covered, versus what’s your responsibility.
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