The heavy rains last Tuesday have caused many residents in Newfoundland and Labrador to file for claims for flooded basements, but the region’s insurance association reveals that many lack proper coverage to deal with the water damage.
“I don’t know what the percentages are, but a lot of people don’t have the coverage, let’s put it that way,” Insurance Brokers’ Association of Newfoundland and Labrador (IBAN) president Kent Rowe told
CBC News.
The insurance industry classifies the flooding of basements due to rising water levels on rivers, streams, brooks, ponds and lakes as “over land water damage.” There is a specific coverage for this type of damage, but Rowe pointed out that many homeowners lack the added coverage.
“The over land water flood protection has only been available in this province in the past 12-18 months,” Rowe explained. “Not every insurance company offers it.”
According to Rowe, over land water damage coverage was created in response to the increased frequency and severity of significant rainfalls over the past few years.
“Water damage claims are the number one source of claims in our industry right now,” he said. “It used to be that fire was. Water is the new fire.”
Although many initially missed out on the insurance feature when it first came out, last week’s flooding has convinced several homeowners to finally opt for over land water damage coverage. Rowe said that while it may be a little too late for some, this is a good development—more people are likely to be protected the next time flooding occurs.
CBC News reported that the added coverage could cost $60 to $90 a year in low-risk zones. High risk zones could see costs as high as $2,500 a year. Those who opt for over land water damage coverage should expect higher deductibles, as well.
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