What is overland water coverage?

With files from Tyler Wade

This post was originally published on February 19, 2019, and was updated on April 4, 2025.  

Did you know that overland water coverage is typically not included in a standard home insurance policy? As it’s often the most valuable add-on when floods happen, this surprises most homeowners. With flooding intensifying in Canada, securing overland water insurance is more important than ever. 

According to Public Safety Canada, flooding is the country’s most common and expensive disaster, causing about $1.5 billion in damages per year. Of the total losses, $700 million is covered by insurance, while the remaining $800 million is uninsured. Homeowners pay about 75% of that cost out of pocket. 

In addition, the Insurance Bureau of Canada reported that 2024 broke a record for severe weather-related insured losses, costing $8.5 billion. A significant portion came from severe storms, flash floods, and hurricanes nationwide.

That’s where overland water coverage comes in. It is an endorsement on your home insurance policy that protects you and your property from water damage risks due to flooding. 

Let’s review how it works and whether it’s right for you.

What is overland water coverage in Canada?

Overland water coverage is a form of flood insurance that can be added as an endorsement to your home insurance policy. 

It protects you from rising rivers, streams, or other bodies of water that may overflow onto dry land and cause damage to your home. It can also protect against heavy rain precipitation or snow accumulation and its eventual thaw around your property. 

All these water sources enter your home through your foundation's windows, doors, or cracks. If water enters your basement, you’ll want overland water coverage.

Why do you need overland water insurance?

Flood risks and water damage to your home can be expensive. If your basement is finished, it will be even pricier as you’ll need to repair drywall, flooring and furnishings. 

Without proper flood insurance, you may be left footing the bill on your own, which is not cheap. The average cost to repair a flooded basement in Canada is over $40,000. In contrast, preventing a flooding basement can cost as low as $250.

It’s also important to check regularly for water seeping into your basement, which could cause incremental damage. Home insurance usually does not cover preventable issues like mold from long-term seepage. If mold is discovered, you may be on your own to pay for the repair. 

If there is a risk of water seeping into your basement, it’s likely worth the cost to waterproof it and avoid other challenges. For example, trapped water in the walls can freeze and thaw, damaging your foundation or seep into wood and cause rot. The best way to waterproof your property is to dig a trench around your home and install a waterproof membrane against the foundation.

Will overland water affect you?

Whether or not you’ll have an overland water claim depends on where you live. However, severe weather conditions are on the rise in Canada and have been the cause of many natural disasters as of late. According to the IBC, flash floods in the GTA and southern Ontario contributed over $1 billion in damage last year. 

If your basement is not waterproofed, your eavestroughs and downspouts need repair, or your foundation has cracks, it could be worth adding an overland water endorsement to your home insurance policy. The same goes when comparing home insurance quotes for purchasing a new policy.

How much does overland water home insurance cost?

Like any insurance policy, the price for an overland water endorsement varies based on the level of risk you bring. For instance, if you live in a low-risk area away from flood threats, your premiums may be lower than those of a policyholder living in a high-risk area. 

High-risk locations often include the bottom of a hill, near a body of water, or in an area prone to heavy rainfall and snow. Homeowners in these locations are likely to pay significantly more or be refused coverage entirely. 

Homeowners in high-risk areas will be pleased to know the federal government announced plans to roll out a National Flood Insurance Program to offer affordable coverage for all Canadians. 

Also read: How making multiple water claims impacts your home insurance

What isn’t covered by overland water insurance?

Several flood endorsements are available for a home insurance policy, so it’s essential to understand what each one covers and doesn’t.

Overland water coverage protects against floods caused by rainfall, melting snow, or overflow from rivers and lakes that enter your home through windows, doors, or foundation cracks.

Sewer backup insurance protects against floods caused by overflowing main drains, which cause sewage to enter your home through floor drains.

Other flooding causes, like burst pipes, are covered by your standard home insurance policy and do not require added endorsements. 

Be aware that any slow seepage or leaks of water are not covered, even if it was a result of overland flooding. Any water endorsement or coverage is in place to provide protection against sudden rushes of water.

Speak to your insurance provider about the different endorsement options to understand what you’re protected for and at what cost.

The bottom line

Flood risks are rising in Canada, making flood insurance a wise investment. Overland flood coverage will keep your most valuable asset financially secure if you make a claim for water damage. Combining the right home insurance policy with preventative maintenance will help keep your home safe and dry.

Also read

• Spring flooding and home insurance
• Should you buy flood insurance?
• 6 things home insurance won’t cover