When it rains, it pours
By Melanie Chambers • Bankrate.com

During an unprecedented Toronto rainstorm in 2004, almost 150 millimetres of water fell during a three-hour period. Rain engulfed entire cars in some areas, while across the northern part of the city basements were flooded, sewers backed up into homes and roofs leaked profusely from the weight of the water.

The storm cut a swath across southwestern Ontario, causing one of the largest insurable losses in Canada in 2005 and the largest in Ontario's history. A whopping $500 million in insurance damages was paid out.

Unfortunately, experts say these storms are not abating; in fact, homeowners should consider how to batten down the hatches, because there's more to come. 

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"Compared to 30 years ago, payments by insurance companies because of extreme (weather) events like wind storms, increased 20 fold," says Paul Kovacs, executive director for the Institute for Catastrophic Loss Reduction, an independent, nonprofit research institute aimed at reducing the loss of lives and property damage from extreme weather conditions.

Homeowners insurance generally covers water damage, but it doesn't always pay out. Read on to see if you're covered.

To insure, or not to insure
No insurance company in Canada offers flood insurance. If a river overflows and the excess water seeps into your home and causes damage, you're out of luck. The idea is that if you live in a recognized flood area, the chances of a storm causing damage to your house are almost inevitable. Insurance coverage is meant to protect accidental or sudden events.

For regular storms, water damage insurance does exist, depending on how that water enters your home. For instance, if a tree falls on your house during a lightning or windstorm and creates a gaping hole in the roof, you're protected. 

"That is covered under insurance because the opening is created by part of a storm," says Ann Lomax, a personal property underwriting specialist for Royal & SunAlliance Insurance in Toronto. "But, if you happen to leave all your windows open that day and water comes in, that's not going to be covered." One incident was accidental; the other could have been prevented.

If your rusty, old water pipes burst, then you may not be covered since you're responsible for the regular maintenance of your home.

Depending on the age of the home and your individual needs, you may not need as much water damage coverage. "If you've got a completely finished basement you may need the (full) $50,000," says Lomax. "(But) if you don't have a finished basement and don't keep anything in your basement, maybe you don't need that much coverage."

Before you sign the dotted line
Before a storm happens, read over your homeowner's insurance policy to ensure you're covered for water damage. Some policies require additional coverage on top of the basic homeowner's package, while other damage protection may be included in the basic policy.

Before you buy a home, assess its risk factors. If it's an older home, always have a house inspector carefully check the water pipes, sewer system and basement foundation for leaks.

Lastly, before you buy a home or insurance, check with the city to see if your home is in a flood zone. If it is, insurance will be more expensive than other areas. And in some areas prone to flooding, insurance isn't available at all.

Big storms
If there's a huge storm, such as one that hit Peterborough and Toronto in 2004, that causes a back up of water to overflow into the city's sewer system and then into your home, there is coverage.

However, you have to request sewer back-up insurance specifically. It's added on to a basic policy and costs extra. In most parts of the country, expect to pay $50 to $40 annually for coverage. If you're in a flood-prone area, there may be a limit on private insurance coverage.

However, there is other money available for these situations. During the 1998 ice storm and Peterborough's flood, government grants were available for homeowners. Contact your municipality for details immediately should your town experience a major storm.

Plug the leaks
There are some precautions every homeowner can take to reduce the risk of water damage, depending on the kind of risks to which you're vulnerable.

When you flush your toilet, the water and waste goes into a pipe, which goes out of the home. In a storm, that water can head into your home, but not if you have a back-up valve, a small flap that can divert water from entering your home. Back-up valves can be installed for a few hundred dollars.

Another option is a sump pump. If water does leak into the basement, a sump pump will divert water from inside the house. Some fancy sump pumps will turn on automatically, and others can hook up to a generator should the power fail. There are also alarm systems to warn you if water is leaking into your home. The alarm can detect abnormal levels of water and stop it at the source.

Another bonus to these prevention systems is that some insurance companies will offer a 10 percent reduction on your insurance premiums if you use them.

Keep a record
Before a storm strikes, experts suggest keeping all renovation or furniture receipts to submit to your insurance company. Also, take photos of the basement to prove what it looked like before the damage.

After the incident, contact your insurance company immediately to start the claims process. "(But) don't make any permanent repairs or replace damaged items before talking to your insurer," says Larry Lythgoe, vice-president of claims for ING Canada in Toronto, unless it poses a health risk or is an emergency, he adds. Your insurance company will want to see the extent of the damage.

Melanie Chambers is a freelance writer in London, Ont.