Water damage is now considered the number one cause of
home insurance claims in Canada. The combination of more homeowners finishing their basements along with the increased frequency of severe weather has caused water damage claims to rise.
Go back 30 years ago to the 1980s and consider the basement in an average Canadian home. It was likely unfinished and used for storage or perhaps used as a workshop, laundry area or even a ‘cold room’ to store food. Over time trends have evolved toward finishing basements to offer more living space and increase the value of the property. Homeowners today are investing thousands of dollars to fill the space with home theatre systems, fitness equipment, and furnished guest rooms. Now that basements are more elaborate and fully furnished, the costs to repair for water damage are rising.
Water damage is now the number one cause of insurance claims within Canada
According to the Insurance Bureau of Canada (IBC), 40% of personal property claims are related to water damage. In addition, insurance claims payouts for severe weather damage are doubling every five to ten years.
Although renovating your basement increases the value of your home, from an insurance perspective, it also increases the cost to repair and replace contents damaged in the event of a loss. At least 60% of water damage claims in the home are attributed to faulty plumbing or indoor appliances, 25% are related to heavy rain or flooding, and 11% are caused by sewer overflow or sump-pump problems.
Another contributing factor to water damage is Canada’s changing climate conditions and more occurrences of heavy rain. According to the IBC, precipitation in Canada has increased by an extra 20 days of rainfall, within the last 50 years. Higher levels of precipitation are straining aging infrastructure in local communities that were designed to disperse smaller quantities of water. These conditions are making more areas susceptible to flooding, increasing the likelihood of water related damage.
As water damage claims continue to rise along with associated repair costs, property insurance rates are increasing accordingly.
BrokerLink is committed to helping you, our valued customers, find ways to keep your premiums affordable and to help you minimize your risks. Be sure to ask your BrokerLink insurance advisor if you qualify for any available discounts, such as installing a water sensor or increasing your deductible.
In certain cases, water damage can be prevented and should be top of mind for any homeowner:
If you are just starting to renovate your basement, be sure to consult a professional when installing new plumbing or upgrading your system.
If you live in a home, condo, or apartment be sure to regularly check hoses on appliances for wear or ruptures.
Install a water sensor, sump pump, or backflow valve.
Don’t forget to inspect your exterior and be sure the grade slopes away from your home.
During the winter season, remove snow away from doors, windows, and the foundation.