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