Water damage is the single most-claimed exposure on Ontario habitational policies, and the coverage is endorsement-driven.
- Escape of water from plumbing: typically covered (named or all-risk) under the base policy: a burst pipe, an overflow from a sink or appliance. Covered, subject to vacancy/unoccupied conditions and prompt notice.
- Sewer backup: water entering the dwelling from the public sewer or septic system. Excluded under the base policy; covered only by sewer backup endorsement. Without it, a flooded basement from a municipal sewer surge is uninsured.
- Overland water (flood), surface water (rivers, lakes, snow melt heavy rain runoff) entering the dwelling. Excluded under the base policy; covered only by overland water endorsement (introduced in the Canadian market in 2015 and now widely available). Coverage availability and limits vary by flood zone.
- Groundwater seepage: water entering through foundations or basement walls slowly over time. Generally excluded entirely; not a sudden and accidental peril.
- Earthquake: excluded under all standard habitational forms; covered only by earthquake endorsement, typically with a high percentage-of-amount deductible.
The broker must ask specifically about basement use, foundation condition, proximity to a watercourse, and flood maps (the insurer will). A failure to offer sewer backup or overland water endorsements where they were available is a frequent E&O claim.
Common mistake: assuming "comprehensive" covers all water damage. It does not. Sewer backup, overland water, and earthquake are excluded by name under comprehensive forms and require named endorsements.
⚠️ Trap: Sewer backup and overland water are two separate endorsements. A client who buys "flood coverage" thinking it includes both can find one peril uncovered. Confirm what each insurer's wording calls each peril.
Recall: Name three water perils typically excluded from the base homeowner's policy. Which water peril is "fast" plumbing damage that the base policy normally covers?