AMA Insider Spring 2017 | Page 23

insurance iq

AMA insurance can now help protect your home in the event of a flood

In recent years , canadIans have been hit by a repeated cycle of severe weather that has wreaked havoc on homes and lives . “ Catastrophic losses ”— insurance industry lingo for insured losses from a natural disaster totalling more than $ 25 million — are on the rise . And the costliest events are happening in Alberta .

Though the $ 3.58-billion insurance bill from last year ’ s Fort McMurray fire was by far the largest in Canada ’ s history , water damage is actually the number one peril nationwide . According to the Institute of Catastrophic Loss Reduction , water damage now accounts for 50 percent of all claims . Even last year , though the Fort McMurray wildfires dominated the news , floods still hit Grande Prairie , Westlock and other Alberta towns .

“ In most communities , the chances of loss due to a storm are greater than loss from a catastrophic fire ,” says Karen McDougall of AMA Insurance . “ Plus , it can be just as disruptive to fix your home due to damage after a storm .”

The numbers in Alberta are staggering : In 2013 , insurance companies paid out almost $ 2 billion due to the Southern Alberta floods . A year later , floodwaters again slammed that part of the province , resulting in $ 568 million in insured losses . Factor in an aging storm sewer system and often overburdened water infrastructure , and water damage becomes a threat to be taken very seriously .

The City of Edmonton is concerned enough that it has earmarked $ 2.4 billion for flood mitigation projects ; officials will begin drafting a strategy this spring . Last November , Edmonton became the first Canadian city to make detailed flood maps available to the public . They show the level of flood risk to houses in 100 neighbourhoods .

And Canadian insurers have started offering coverage for overland flooding — water from rivers and lakes that enters a home through windows and doors — which was previously unavailable in Canada . “ As we see more of these big weather events , our members are looking to us for more inclusive coverage , in particular , better protection for water losses ,” McDougall says . “ We responded by reviewing our coverage and looking at ways to better protect policyholders .”

Last June , AMA Insurance rolled out its Enhanced Water Coverage Endorsement , which provides limited coverage for eligible policyholders for incidents like overflowing rivers , failed sump pumps and spring thaw . So if your window wells fill and leak into your basement during a heavy storm , the new endorsement now covers you . Or if flooding overwhelms your neighbourhood ’ s sewer system and causes water to back up into your home , you ’ re covered for that too .

McDougall notes the endorsement is far more comprehensive than what was previously available . “ But there are coverage limits and eligibility requirements , so people should talk to their insurer to fully understand what their policy covers ,” she says .

“ Considering the amount of damage a sewer back-up or sump pump failure can do , Enhanced Water Coverage is a valuable investment .”