I don’t think this blog post needs a big introduction as to what the majority of Torontonians experienced last night….floods everywhere! With high waters came flooded basements and as I did my rounds this morning with all my clients that bought homes in Toronto, luckily none of them experienced any water in their basements. But I did receive these 2 questions a lot……what would happen if my basement did flood, is there such thing as flood insurance for homeowners,what if I have tenants? These where all really good questions that I didn’t have all the answers too, so after a phone call to my home insurance company, here’s what I found out.
Home Owners Insurance-Owner Occupied
- There is no such thing as flood homeowners insurance in Ontario
- No coverage for water seeping through your foundation wall
- Here are a couple of options:
- Comprehensive Coverage on Contents– this is an additional insurance that can be bought with your basic homeowners insurance policy. Your basic homeowners insurance only covers some risks associated with damage, fire, etc. With this comprehensive coverage on contents all risks are covered including flooding. Unfortunately if your basement floods your insurance company WILL NOT cover the costs to repair the damage caused to your basement, but what they will cover is damage caused to your contents that were sitting in the basement and were ruined. Didn’t you mention you had an original Picasso sitting in your basement?
- Sewage Backup Coverage-if your basement floods due to a sewage backup during a storm like we had last night or any other time, the insurance company WILL cover the costs to repair the damage in your basement but only due to a sewage backup. Although it’s nasty to have the city’s sewage floating around in your basement, if your basement was going to flood and if you did buy this insurance, this would be the best kind of flood to have. Since most Toronto basements leak, I believe this would be money well spent, especially if you have a finished basement in your home
Homeowners Insurance-Tenant Occupied
- This applies to landlords who carry a rental dwelling policy and do not live in any parts of the home
- Always advise your tenants to buy tenants/contents insurance before you hand over the keys and ask for proof
- Under the rental dwelling policy, landlords cannot make any claims for tenant’s damaged goods
- Some insurance companies don’t allow the landlord to buy sewage backup coverage under a rental dwelling policy
- In addition to the basic tenants/contents insurance, tenants CAN purchase sewage backup coverage and comprehensive coverage
- If your tenants have not purchased the additional coverage mentioned above and their contents get ruined by a flood, tenants can sue the landlord for the damage costs
- If your tenant does sue you for damages, as a landlord you have coverage through your liability insurance in your policy
Hope this has shed some light about homeowners insurance policies and floods. For any additional questions or clarifications, always contact your insurance company to make sure you are protected, whether you’re the one living in your home or tenants.
If you’re just starting to shop for homeowners insurance, then you should definitely read, How To Shop For Homeowners Insurance
Did your basement flood during this freak storm in Toronto? How did you handle it? Please share your stories and tips!