Part 1: Flooded basement? If it’s from a river, don’t expect insurance money
With massive floods in Calgary and Toronto this year leading the way, Canadians have claimed more than $5 billion in flood-related damage.
But if not for senior levels of government stepping in to foot the bill, many of those claims would have gone denied – as Canada stands along among G8 countries as the only nation not to offer insurance in case of overland flooding.
Most Canadian home insurance policies cover flooding only in cases of sewage system backups.
The Insurance Bureau of Canada sees no reason to advocate for overland flood insurance, telling CTV News in a statement that it would disproportionately hit Canadians who would never need it.
“Overland flooding is a risk for only the small percentage of the population who live in floodplains or flood-prone areas,” the organization says.
“Since most homeowners aren’t exposed to this risk, they shouldn’t be expected to share in the cost.”
The bureau also notes that in the other seven G8 countries, governments play a role in overland flooding insurance programs.
Along the Nith River in New Hamburg is one area where homeowners are regularly exposed to risks of overland flooding.
Although there is little flood damage most years, that wasn’t the case in 2008.
That year, water levels in the basement of Phylis Sisco’s home on Grace Street peaked at about one foot – and remained there for the better part of a week.
After that, Sisco and her husband installed three sump pumps to ensure they wouldn’t get caught by overland flooding again.
Even with the sump pumps, the Siscos – who have lived on Grace Street for 44 years – have learned not to take any chances when flood warnings are issued.
“We get the covers all off and we get prepared. We pick up things in our basement,” she says.
Despite not wanting to adopt overland flooding insurance, the insurance industry isn’t completely idle on the matter of floods.
University of Waterloo climate change researcher Blair Feltmate recently completed a study on flood probability, with Canadian insurance companies paying for the work.
“One of the points that all the executives agreed upon is that we need up-to-date floodplain maps in Canada,” Feltmate says.
While the Grand River Conservation Authority updates its floodplain maps annually and posts them online, most conservation authorities do not.
In the last 10 years, there have been nine floods in Canada that caused more than $500 million in damage – compared to three such floods before 1990.
Part 2: Looking at life insurance: Many plans for many situations
Home insurance and car insurance are applied nearly universally in Canada, but life insurance remains optional – and for many, it remains a source of headaches and uncertainty.
According to one study, half of all Canadians don’t have any form of life insurance.
Matt Strauss, a Kitchener-based insurance agent, says clients almost always come to him with two items to discuss: how much life insurance they should buy, and of what type it should be.
In Rob Milovancev’s case, searching through the hundreds of life insurance options on the market to find the right product for his situation didn’t even cross his mind until his situation changed.
Once he started a family, he says, it suddenly became a no-brainer.
“If I didn’t have a family, I wouldn’t have life insurance,” he tells CTV News.
Milovancev then looked into the two questions Strauss commonly receives, and quickly realized there was another factor at play in his case – his desire to leave money behind for his children should something happen.
Experts say the biggest factors to weigh before deciding on life insurance include debt levels – as the insurance payout should be enough to cover off outstanding debts.
Age also plays a major role in determining the cost of life insurance.
“Life insurance rates increase on an exponential curve,” says Strauss.
“The difference between a 30- and a 35-year-old may not be that significant, but the difference between a 30- and a 50-year-old is quite significant.”
Strauss warns that insurance companies dispute payouts on deaths within two years of taking out a new life insurance policy, as they may think policyholders didn’t disclose their full health status.
Part 3: Streamlined insurance compensation means new challenges for crash victims
