May 2, 2019. As the rivers and lakes across Ontario rise this week threatening home owners, I picked up my home owner’s insurance policy to review what kind of insurance coverage I had. My home is not in any danger, but I felt compelled to make sure I had sufficient coverage. What I discovered was a complex and often misunderstood set of policy provisions.
I encourage anyone who either has an insurance claim or is worried about one, to get a copy of their policy (and I mean the boring written portion) and give it a read, preferably with your insurance broker.
Right off the bat I noted that the basic “Home Owner Policy” had a series of specific “Excluded Perils” relating to water damage. A “peril” is an insurance term that defines the various bad things that can cause damage to your property. My policy excluded damage from earthquakes, ground movement, (settling of the foundation) floods, water from eavestroughs, drainage pipes, sewers, septic tanks, sump pumps, ground or surface water, melting snow and ice, and a rising water table.
Well, that was a bit shocking!
Happily many of these “excluded perils” were removed by purchasing additional coverage also known as “endorsements”. This is extra insurance to cover additional perils. What you need to remember is that, not only do you need to pay for additional coverage, the coverage amount may be much smaller than say, the full replacement value of your home.
In my case my broker recommended, and we agree to pay for additional coverage for
- Damage from an Earthquake,
- Water damages from above ground water, snow and sleet
- Ground water and sewer back-up
- Flood caused by the overflow of a body of water.
The cost of this coverage was 1/3 of my total premium and the coverage amount was relative small compare to the overall value of the home. If I had a basement flood the insurance might cover a partial repair of a portion only, of the finished basement.
For people who live by a river, I can only imagine that the cost to purchase this additional insurance must be extremely high. Given that we are experiencing a once in a 100 year event, should home owners be forced to pay ridiculous premiums just to get basic coverage?
Insurance companies have been gouging these customers for too long. Just as the Ontario government regulated auto insurance to provide injured car accident victims basic benefits, so should they impose rules on home owner policies. Everybody deserves insurance protection in the event of a very unusual natural disaster.
Should you feel that your insurance company has wrongfully denied your claim or that your insurance broker failed to properly advise you about coverage, please call our office for a free initial consultation or email me directly at agirones@gironeslaw.com.
