Whether you’re a renter living in a basement apartment or are the owner of a home or condo with a basement, one of the things you dread most is a flood – and for good reason! A flooded basement can be stressful to deal with, challenging to address, and expensive to fix. In fact, the Government of Canada reports that the average cost to repair a flooded basement is over $40,000.
This leads to an important question: does insurance cover basement flooding? Considering the potential damage to your home’s structure and personal belongings, it’s a valid concern. However, the answer isn’t as straightforward as a simple yes or no, which is why we’ll break it down in more detail below.
As always, bear in mind that this article is meant to give you a general overview and understanding of the topic. Never make assumptions about your policy, as coverage can vary significantly depending on the type of insurance you have and the insurer you’re with. Instead, it’s best to review your policy documents and contact your insurer, as needed, for clarification.
Does insurance cover basement flooding?
Homeowners, condo owners, and renters all share a common concern when it comes to basement flooding. Generally, standard home insurance policies in Canada cover water damage resulting from unpredictable and unforeseen events, such as burst pipes, sudden plumbing failures, appliance malfunctions, and even firefighting efforts. This means that if your basement floods due to one of these incidents, you may be eligible for compensation up to the limit specified in your policy.
However, basements can flood for many other reasons, such as heavy rain and sewer backups. In these cases, standard home insurance policies typically do not provide coverage. To protect against these risks, you likely need to add overland and/or sewer backup coverage. Since these coverages are often optional and not included in standard policies, you may find yourself without adequate protection if you haven’t added them.
To avoid this situation, it’s important to understand the purpose of the two main types of optional water coverage and consider adding them to your current policy:
Overland water coverage
Overland water coverage protects against damage caused by fresh water, such as heavy rain or rapidly melting snow, entering your home through ground-level points like basement windows, doors, foundation cracks, and other susceptible areas. Since basements are typically at ground level, they are especially prone to overland flooding, making this an important coverage for any home or condo owner with a basement, or renter living in a basement.
Sewer backup coverage
Sewer backup coverage protects against damage caused by water backing up into your home from sewers, floor drains, or septic tanks. Since sewer pipes are often located beneath the floors of your basement or nearby, basements are especially vulnerable to damage from sewer backups. Not only that, but sewer backups often require professional clean-up and repairs, which can quickly add up to thousands of dollars out of pocket without this type of home insurance coverage.
Why insurance won’t cover a flooded basement
If your basement floods due to an excluded cause in your policy, you may not receive compensation for the damage. Understanding common exclusions – such as wear and tear or improper maintenance – can help you take proactive steps to prevent them. For that reason, here are six reasons why a home insurance claim for a flooded basement may get denied.
- Intentional damage: Damage caused by deliberate actions, such as intentionally blocking drains, sabotage, or creating conditions that lead to flooding.
- Business activities: Damage caused by activities related to the commercial use of your home, such as flooding from a sink in a basement hair salon.
- Wear and tear: Damage caused gradually over time, such as aging pipes or worn-out seals, that could have been prevented with regular maintenance or timely repairs.
- Improper maintenance: Damage caused by neglecting necessary upkeep, such as failing to address water drainage issues or not repairing cracks or gaps in the foundation.
The ABCs of dealing with a flooded basement
When faced with a flooded basement, it’s best to take a methodical and strategic approach, such as the one outlined below. Doing so will help you avoid causing more damage or risking your chances of a successful insurance claim.
Step 1: Assess
Assess the situation immediately to understand the safety risks and determine the extent of the damage.
- Do not touch the water if you suspect it is electrically charged
- Immediately turn off the power supply to prevent electrocution
- Identify the source of the flooding to determine if it’s a burst pipe, sewage backup, or rain-related
- Check for any potential hazards like unstable structures, debris, or sharp objects in the water
Step 2: Break down
Break down the situation into actionable next steps, focusing on what needs immediate attention to minimize further damage.
- Look for potential structural weaknesses, such as cracked foundations or damaged walls
- Determine if any furniture or valuables need to be moved
- Create a list of damaged items that need to be replaced/repaired later
Step 3: Call
Call your insurance company to report the damage and get approval to bring in professionals for cleanup and repairs.
- Contact your insurer to initiate the claim process and ask about next steps
- Inquire if there’s an approved list of professionals or contractors you need to use
- Call water damage professionals, plumbers, or restoration experts to assess the situation and begin necessary repairs
Step 4: Document
Before any cleanup or repairs begin, take photos of the affected areas, the source of the flooding, and any damaged possessions or structural issues.
- Photograph the extent of water damage
- Include close-ups of damaged items or fixtures
- Include the source of the flooding, such as broken pipes or windows, if possible
- Record any visible signs of mold or mildew growth for reference
Step 5: Enlist
Enlist the help of professionals for cleanup, restoration, and repairs, especially if there’s contaminated water, sewage, or mold involved.
- Follow your insurer’s instructions and only handle tasks that are safe for you to manage yourself
- Use commercial-grade drying equipment and tools, as needed
- Hire professionals to safely remove hazardous materials
- Enlist licensed plumbers and electricians to address any plumbing or electrical system damage
- Hire specialists to thoroughly inspect, contain, and remove mold growth