Risk & Business Magazine Reider Insurance Fall 2015 - Page 27

provide coverage for the damage caused by a broken pipe or hot water tank. An optional coverage is to purchase Sewer Backup coverage. This provides coverage in the event of backup of a sewer, sceptic system or sump pump. It is important to remember that in many cases there is a maximum amount that will be paid out for sewer backup losses and there is often the opportunity to purchase additional coverage limits. Not everyone will be eligible for Overland Water coverage and Aviva requires that the client be a minimum of 100 meters from a body of water (ie. lake or river) and not have a inward sloping driveway. For those clients who qualify (estimated to be about 95% of clients), they will be charged based on their individual risk factors and the location of their homes in relation to flood mapping. With Aviva the average premiums can range substantially from $59 per year to $7,875. While some people may feel that the premiums are high (especially those in high risk areas), the big thing to remember is that if you don’t purchase the Overland Water coverage, this will likely invalidate you for reimbursement through the Government programs. So on the one hand having this coverage will allow consumers to have significantly better coverage and appropriate insurance limits. On the other hand it will add another expense to their insurance renewal. Why this type of insurance is being offered? Insurance companies did not provide any overland water insurance in the past, however they did provide sewer backup coverage. When the recent flooding happened in areas which normally do not see flooding, nearly all of the sewers backed up and caused damage. These backups caused insurance companies to be left on the hook for covering expenses which were related to the floods but which they were not expecting. One of the major changes that Aviva will be introducing with the new Overland Water coverage will be an exclusion to their sewer backup coverage whereby water damage will no longer be covered under the standard sewer backup coverage if there is evidence that flood or overland water entered at the same time. This change is irrelevant and in fact an improvement to coverage if you purchase the Overland Water coverage, however it is a significant change to the coverage that was previously offered under the sewer backup policy. Brokers, including Reider Insurance, provide flood insurance through their dealings with Aviva Canada. In 2016 the