Risk & Business Magazine Reider Insurance Fall 2015 - Page 26

Flood Insurance for Homeowners Coming Changes Will Bring Better Coverage BY: SHALE REIDER, PRESIDENT, REIDER INSURANCE W hen you purchase a home insurance policy there are many options and additional coverages that are available. However, up until now, flood insurance was not one of them. In the past when there has been a flood in Manitoba, it has been up to the government to determine if you qualify for reimbursement under the Emergency Measures Organization (EMO) /Disaster Financial Assistance. In order to qualify: • Water Damage must be first declared a disaster event by EMO • Determine eligibility (ie. Principle Residence, Rental, Seasonal, Farm, Small Business). • Assistance is limited to a maximum re-imbursement of $240,000 (on principle residences), however different occupancies for example a Seasonal residence receives significantly less. speaking this endorsement will not provide “flood coverage” – which Aviva defines as coming from a body of salt water (such as an ocean). However, the Overland Water Endorsement will provide coverage for fresh water (such as lakes and rivers). It covers the sudden and accidental entrance of water through foundations, basement walls or basement floors caused by: • The unusual and rapid accumulation or run off of surface waters from any source, including torrential rainfall. • Coverage is only provided for 80% of the eligible costs and losses • Assistance is NOT AVAILABLE if the losses could have been insured (at a reasonable and available rate). The reimbursement available was far better than nothing, but many people affected by flood ended up having to pay significantly out of pocket in order to repair or rebuild their homes. Aviva Canada is one of the largest insurance companies in Canada and they have announced that they are now offering what they call an “Overland Water Endorsement”. Technically 26 • The rising or, breaking out of the overflow of any body of fresh water. Aviva states that tens of thousands of Canadians have suffered from water damage in recent years, including devastating floods in both Calgary and Toronto in 2013. The average rainfall in Canada has increased 12% over the past 60 years with 20 more days of rain a year since the 1950’s. Environment Canada states that severe weather events that used to happen every 40 years can now be expected to happen every six years. RISK & BUSINESS MAGAZINETM FALL 2015 While Aviva is the first company in Canada to offer this coverage, most of the other insurance companies in Canada have reported that they intend to bring similar product offerings in 2016. While this coverage will be well received by many people, there are two big problems that now come about. Will the Government still pay for flood damage? The way that the issue of disasters and reimbursements has worked in the past, is that the government will only cover people if they could not purchase insurance. Since Insurance Companies, up until now, have not been providing flood insurance to individuals, this has not been an issue. Many people think that their home insurance will cover them if they have water damage. However, this is not the case. Most home insurance policies