Whether or not you believe in climate change and global warming, the fact is that Canada has seen a record number of flood events since 2013. That was the spring that flooding on the Bow River impacted many cities and towns in Alberta, and was followed by a flash flood on the Don River in Toronto that required boat rescues for people stranded on the Don Valley Parkway.
A list of the headlines on the website Floodlist.com, show that floods have impacted Canadians from the Maritimes to British Columbia, and 2019 is shaping up to be the worst year on record.
You may, or may not know, Fire Insurance as it was originally known, was invented in 1752 by Benjamin Franklin who started the Philadelphia Contributionship for the Insurance of Houses from Loss by Fire which became the first mutual fire insurance company in America. For more than 200 years, being able to replace a property due to Loss by Fire was the primary purpose of Home Insurance or Business Property Insurance. However, that has changed over the past decade.
In my opinion, there are three main things at play here. One, people like to be close to water, and waterfront properties have a strong appeal and market value, but in today’s environment, this means you are really in harm’s way. Two, as urban development intensifies, there is more pressure on an aging infrastructure that cannot keep up with the volume of water from showers, toilets, and dishwashers from an increased number of households, nor the unpredictable weather that we have experienced over the past 5 years. Three, people are looking to maximize the usable space in their homes and are investing in renovations to turn basements into high-end Family Rooms, Home Offices, Studios, AirBnB’s, and more.
This means that water, whether internal from a sewer back-up or external from heavy rain or flood goes to the lowest possible point in a building, making a big mess along the way. The upshot is that the cost of repairing or replacing a nicely renovated basement or rental space is significantly higher than it was when the majority of basements were unfinished utility and storage spaces.
The bottom line is that ANY water loss is going to cost a lot more to mitigate than it did 20 years ago. This is amplified because there is often a major concentration of loss in one place when there is a flood. Rather than a house fire that can be dealt with fairly quickly by the local Fire Department, a flood situation will destroy an entire neighbourhood or community.
The basic concept of insurance is to spread the risk of loss among many, so the cost is not unbearably high for any one party. Weather-related water losses are inherently unpredictable which means, ultimately, that all insured parties will have to pay their fair share to support the pool of funds required to pay claims.
So, do not be surprised when you see an increase in your insurance home or business property insurance rates at renewal. Part of the increase is a reflection of the changing risk landscape where it is arguable that water has truly become the new fire. The key will be to work with an Insurance Partner who has access to many markets to ensure that (a) you are properly protected in the event of a Sewer Back-up or Overland Water event and (b) you get the coverage at the best possible price.
Contact Case Insurance Brokers for a Complimentary Sewer Back-up and Flood Coverage Review. You might be surprised to find out what little coverage you actually have!
Click here to get started: https://www.caseinsurance.ca/free-account-review!