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Does insurance cover water damage to my home?

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What about flood damage?

Years ago, it was virtually impossible to get insurance coverage against flooding, defined by the Insurance Bureau of Canada (IBC) as when bodies of fresh water, such as rivers or dams, overflow onto dry land. Sewer backup insurance was available for an extra fee, but any overland flood—where water enters the home through an above-ground route—wasn’t covered.

This changed in 2015, when insurance company Aviva introduced Canada’s first overland flood protection add-on coverage. Today, just about every insurance broker and provider offers some sort of flood coverage to clients, as long as those clients don’t live in a flood-prone zone. Note: While government relief may be available for uninsurable damage, it is often slow to materialize and insufficient to cover the cost of repairs, leaving families to pick up the pieces.

Is “seepage” covered by home insurance?

Seepage—the slow, ongoing infiltration of water, as opposed to an accidental, sudden burst of water—is a common exclusion in home insurance policies.

As a home owner, you may be unaware of a leak until there’s evidence of it, such as the growth of mould, the appearance of rot or a bulging ceiling where water is pooling. Or, you may only learn of the water damage after calling in a repair specialist who discovers it while dealing with a different issue. 

If you make this type of claim, some insurance companies will refuse coverage based on the fact that regular home maintenance was not performed. Other insurance companies may cover the claim if the leak and damage were hidden in walls, beneath floors or above the ceiling—in other words, in areas that are not visible to the eye.

To determine if you have coverage, check if your policy has a seepage exclusion or call your independent insurance broker for guidance.


Watch: MoneySense – Home Insurance & Climate Change

You need two types of coverage to be fully protected

If you want protection against overland flooding, don’t be surprised if your insurance provider says that you must also pay for sewer backup coverage. When a water damage claim is filed, the cause is often a mix of sewer waste and clean flood water. Since it’s difficult to determine which came first, insurance companies often require clients to pay for both types of coverage. 

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