Mike's Comments

Feb 5, 2010


Water, Water, Everywhere!!!!!!

The 'traditional' name for Property Insurance was 'Fire Insurance.' This term is still often used when referring to home or business policies even though the coverage available has been far more extensive than fire losses for many years. What has changed most over the last 10 years is that water damage has now overtaken fire damage as the largest and most expensive cause of property claims paid by Insurance Companies in Canada. Just one storm on August 19, 2005 in the Toronto area led to over $500 million in property damage claims.

Whether these types of storms are the result of global warming or are simply anomalies is up for endless debate, however there is no disputing that both the frequency and severity of these claims have increased dramatically. Setting aside the 'weather debate' there are three main causes for this trend:
  1. Increased property development has led to fewer 'green spaces' to absorb rainfall,
  2. The dramatic increase in the percentage of homes with finished basements mean that a flooded basement now costs on average $40,000 - $50,000 to clean up and restore. Sewer backups are particularly expensive to repair because the entire area needs to be stripped to the concrete and disinfected,
  3. Aging sewer and drain systems may not be as effective as they once were at quickly removing runoff.. For example, we have seen a number of claims where tree roots got into drain pipes and prevented waste water from getting out of the house.
When I got my start in the business, 'sewer backup' coverage was a new thing, and was often thrown in for no charge. Now it is more important than ever to very carefully review the coverage available. Some companies are adding limits, others are charging higher deductibles and in some areas, Insurance Companies are refusing to provide this coverage at all. Where the coverage is available, the premium for it is ranging wildly from as little as $30 to over $200.

Our advice? First, protect yourself as much as you can. There are many ways to prevent water damage and sewer backup losses, including sump pumps, backflow valves, proper drainage of downspouts and even rain barrels, as I've mentioned elsewhere on the site. Second, know your coverage. Insurance is the second line of defence after you have done your best to prevent a loss. We would be happy to review the coverage you currently have and offer suggestions for any available alternatives. A water damage information and prevention brochure is also available on our site. (download brochure) Remember, if you're not sure about your coverage, please give us a call or send an e-mail - we'll be happy to review it for you.

Michael Stuart, BBA, FCIP, CRM, CAIB
Grant, Jones & Stuart Insurance Brokers
Phone: 905-470-2732 ext 225
Toll Free: 1-800-445-2270    Fax: 905-470-2762