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

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• 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