Risk & Business Magazine Gifford Associates Spring 2016 | Page 31

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& Stemming the Tide
B The Importance of Flood Insurance
BY: GIFFORD ASSOCIATES

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hanging weather patterns and
increasingly warm winters have led to
much more flooding than we have seen in
past decades. With that, there have been
a number of changes in the way property
owners must deal with their potential
risk. Flooding does not typically fall under
homeowners insurance, and even when it
does it is not sufficient to handle the damage
that could be done. The increasing number
of floods, changes in responsibility for who
handles them and the rise of private flood
insurance have all contributed to the new
landscape that we all have to deal with.
In the past, flooding was relatively easy
to handle. The Canadian government
would determine whether or not a flood
had taken place and, subsequently, would
provide assistance to anyone who had been
affected by it. The issue with that is, of
course, that sometimes a flood could occur
and not be declared a flood, leaving affected
individuals in the lurch. Beyond even that,
the assistance provided would often not be

sufficient to handle everything. With flood
incidents occurring more and more often,
changes were needed to make this system
work better.
In the last few years, insurance companies
have begun providing flood coverage for
property owners. This covers properties
and most personal possessions inside
the home from loss and provides liability
coverage as well. In 2015, three of the
largest insurance companies in Canada,
began to offer overland flood coverage.
Other companies are quickly following
suit. Most coverage, at the moment, does
not include damage from dam breaks,
coastal flooding, tsunamis, or saltwater
floods. It is primarily meant to handle
heavy rains, snow melt and other situations
in which the property becomes inundated
with water (including sewer backup).
Flood coverage is not something you
should be on the fence about. For one
thing, many mortgage agreements require

flood insurance. In the United States (and
likely soon in Canada), flood coverage is
mandated by the government for property
owners. Taking this to a more personal
level: nobody wants to be left holding
the bag while their home and personal
property is washed away in a deluge. That is
the sort of situation that can be extremely
disruptive to a person’s life. Given the
increasing amount of flooding due not
only due to inclement weather, but also
due to the resulting sewer backups, it isn’t
enough to rely on government assistance
and hoping that a flood will be declared
anymore. Now it is a matter of taking the
risk into your own hands.
If you don’t have flood coverage, it is a
good idea to consult with someone and see
what sorts of risks you might be facing. We
would love to hear from you and would be
glad to go over your current policies and
evaluate your potential exposures. For
more information, you can contact us at
[phone].

SPRING 2016

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