What is sewer backup insurance?
When wastewater flows back into your pipes from the city's main sewer lines, it can cause a sewer backup. It will typically seep up into your basement through floor drains. It can also happen when there is a blockage in the plumbing or sewage system.
Sewer backup insurance is an optional policy endorsement. It’s commonly referred to by insurers as a sewer backup rider. This means its an add-on and not part of basic home insurance plans.
It provides you with additional insurance specifically against damage caused by backups in your home. It will cover the costs of cleaning up and repairing the areas affected and replacing and restoring affected personal belongings.
When comparing endorsement options, be mindful that many of these policies have defined coverage limits and higher than average insurance deductibles. So, make sure you select an add-on that reflects protection requirements.
How does sewer backup insurance work?
Sewer backup insurance is only covered if you add it to your Ontario home insurance. It’s not covered under basic plans, and you will need to already have insurance with an insurer to add this type of protection. It's not typically a standalone policy you can purchase.
Like other types of additional insurance, sewer backup insurance is an add-on endorsement to your policy. It’s not included with overland flood or water damage policies. Your average home policy offers limited protection if you experience a sewer backup. This insurance gives extra protection along with supporting your basic level plan.
It's exceptionally important if you have a finished basement, live in a basement apartment, or store a lot of stuff in your basement because this endorsement will cover the repairs or replacement of almost everything in the basement that is damaged by a sewer backup. It’s worth it for most homeowners because repairs for drywall, flooring, insulation, and appliances can easily be up to $30,000 or more to repair. By adding the additional protection to your policy for about $100 or more a year, you won’t have to worry about paying out of pocket.
If you are considering purchasing sewer backup insurance, it’s a good idea to consider your elevation to sea level, your neighbourhood density relative to your sewer line, and the frequency of severe weather. Finding out how often claims are reported can also be helpful.
With some insurers, the installation of a backwater valve may be required by your provider.
According to IBC, depending on where you live and the prevalence of sewer flooding events, your insurer may request you to install a backflow valve. If you have suffered substantial damage, installing a backwater valve may be required to get insured moving forward.
A sewer backup insurance example
You get home from work one evening and notice something smells off. You walk around the main floor, check for water or other issues, and don’t notice anything. You begin to make your way to the basement, and you notice there is sewage on the ground, and it’s ruined your whole basement. You will be covered for the damages if you have sewer backup insurance.
However, if you only have the basic level of insurance, you will not be protected for the repairs and will have limited coverage.