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water damage and the importance of sewer backup

What Is Sewer Backup Coverage And Why Do You Need It?

Sewer backup is perhaps the most important element of coverage in your home, tenant or condo policy. But do you even know what it is? The staff at McDougall Insurance go to great lengths to ensure that the policies we write all carry sewer backup (known as SBU) coverage, but sometimes just recommending the coverage isn’t enough. Although you may, or may not, currently have sewer backup coverage on your policy, knowing about the endorsement is a key way to ensure that you are exposing yourself to an acceptable amount of risk, and getting the most out of your policy. Like Sir Francis Baron says, “Knowledge is power” (he would have been a big fan of Insurance Brokerages).

So what is Sewer Backup?

Sewer backup is an extension to your regular home, tenant or condo insurance policy, which will pay for damages to your home done by, well, the sewer system backing up. Sewers can backup during periods of heavy rainfall, when the city sewer system can simply not handle excess water, causing it to overflow into your home. This water emerges from your plumbing, and can wreak havoc on your property, especially on lower floors or basements. It also usually smells horrible.

Insurance can do nothing to protect you from the smell, but it also experiences issues protecting you from the water. The problem with water damage, and the reason you need sewer backup, is because pretty much all forms of water damage are excluded from your default habitational policy. There are several exceptions to this rule, but it is very hard to get a claim paid if it’s caused by water. Adding sewer backup coverage rectifies this, making it so that water damage from sewers is no longer excluded, and allowing you to make a claim if you basement is damaged by a backup.

These types of claims are extremely common; especially around areas with a low water table and periodic, heavy, episodes of rainfall (a lot of Eastern Ontario fits this description). That alone should be enough motivation to purchase this coverage, but like so many other critical but small parts of insurance, it also costs a fraction of your main habitation policy.  And that is McDougall Insurance’s logic behind constantly pushing sewer backup to our consumers. Inexpensive and useful is a really good combination, one which we feel is too good for our customers to pass up.

Now that’s not to say that sewer backup is the perfect coverage, and there are several snags that you should remain aware of. The first issue is that insurance companies pay very close attention to sewer backup coverage, as they spend a large amount of money in handling sewer backup claims every year. Because the amount they have been paying out is so high, many companies have imposed special limits or conditions upon the policies, to reduce the amount they need to pay. A good example is Intact Insurance, who forces a $2000 deductible onto any sewer backup claim you might have, regardless of the deductible on the rest of your policy (which is typically much lower). The best way to know what conditions are placed on your policy is to ask your broker, who will know the specifics regarding your insurance company.

Another drawback is that sewer backup is not available in certain areas that have a high risk of flooding, and that sewer backup does not provide coverage for any other types of water damage, like a flood. Flood coverage or overland water protection is a separate coverage you must purchase. If you would like to learn more about water coverages, and possible extensions to improve you policy, you should speak to your broker. Do you need Sewer Backup Coverage? Yes you do. Because with the proper insurance, your finances can stay high and dry, even while the low parts of your home are getting very, very, wet.


Do you have questions about sewer backup coverage? Just ask Eric The Intern!

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