Most Ontario home policies cover neither overland flood nor sewer backup. A London broker explains the difference, and how to check what you actually have and how to protect yourself from water damage
There is a particular smell that tells a London homeowner exactly how bad their week is about to be. You open the basement door after a long August thunderstorm and it hits you before you see anything — that damp, faintly sour note of wet drywall and soaked underpad. Then you get to the bottom of the stairs and see the waterline on the boxes.
The next question out of almost everyone’s mouth is the same one, and it’s the wrong one.
Am I covered for water damage?
I understand why people ask it that way. “Water damage” sounds like a category, the way “fire” is a category. It isn’t. On a standard Ontario home policy, water is not one thing you’re either covered for or you’re not. It’s at least four different things, and which one soaked your basement determines whether you’re making a claim or writing a cheque.
That’s the part almost nobody is told until the day it matters. So let’s go through it now, while it’s dry.
Water gets into your basement through three different doors
Insurers don’t think about water by how wet you got. They think about it by where it came from.
Door one: a pipe inside your house. The supply line to the washing machine lets go, the hot water tank splits, a pipe in an exterior wall freezes and bursts. This is usually the good news door — sudden and accidental internal water escape is covered under most standard home policies. Not all of them, and not always the resulting damage to everything you own, but this is the one most people are actually insured for.
Door two: the municipal sewer or storm system backs up. The system takes on more water than it can move, and it comes back the way it came — up through your floor drain, your laundry tub, sometimes the basement toilet. This is sewer backup, and on a standard policy it is not covered. It’s an optional endorsement you have to ask for and pay for.
Door three: water arrives across the surface of the ground. It runs off a saturated yard, over a curb, down a driveway and in through a window well or a foundation crack. This is overland flood, and it is a completely separate optional endorsement from sewer backup. Different coverage, different limit, often a different deductible.
Buying one of those two does not give you the other.
I have had this conversation with homeowner’s more times than I can count. Someone tells me with real confidence that they have flood coverage. We pull the policy. They have sewer backup — bought years ago after a bad spring — and no overland flood at all. Or the reverse. They weren’t careless. Nobody ever explained that they were two separate decisions.
There’s also a fourth door that isn’t really a door at all: ground water seeping through a foundation, and water that gets in gradually over time. That’s typically excluded even when you have both endorsements. Insurance is built to respond to sudden and accidental events, not to a foundation that has been weeping for three years. If your basement gets damp every spring, that is a repair conversation, not a coverage conversation — and I’d rather tell you that now than after a denied claim.
The gap between what’s available and what people have
This is the part that genuinely surprised me when I started looking at the national numbers.
Overland flood coverage barely existed in Canada a decade ago. Insurers didn’t offer it to homeowners. Today, the Insurance Bureau of Canada puts availability at roughly 94% of Canadian homes — the overwhelming majority of us can buy it.
Uptake has not followed. Industry surveys consistently put the share of homeowners actually carrying flood coverage in the low double digits at best. In Ontario specifically, a 2026 LowestRates survey found 12% of homeowners added at least one endorsement in 2025, up from 9% the year before — moving in the right direction, slowly, from a very low base.
Meanwhile the water keeps arriving. The IBC reported more than $2.4 billion in insured damage from severe weather across Canada in 2025, the tenth-costliest year on record. Water-related losses have risen more than 300% over the past two decades and now account for roughly 39% of insured catastrophic losses. External water — overland flood and sewer backup together — made up close to a quarter of all Canadian home insurance claims in 2025.
So: a quarter of claims, coming through the two doors that are optional on almost every policy.
What London’s flood prevention grant actually covers — and costs
The City of London runs a Basement Flooding Grant Program (by-law A.-7562-160) that will fund up to 90% of eligible flood-prevention work on residential property.
Before publishing this, I checked with the City on who actually qualifies, because the assumption most homeowners make — that certain streets or neighbourhoods are covered and others aren’t — isn’t right. The City doesn’t maintain a list of eligible areas. Eligibility comes down to your property’s own circumstances: homes that have flooded before, or that are at risk of basement flooding because of overloaded sanitary sewers, are the ones most likely to qualify. Homes built before the mid-to-late 1980s carry extra risk, because many older properties had their weeping tile connected directly to the sanitary sewer lateral — during a heavy rain, that sends extra flow into the sanitary system and raises the odds of a backup. For a straight answer on your own property, visit london.ca/bfgp or email the City directly at [email protected].
As for what the work costs: I asked Marty Salliss of Salliss Plumbing & Heating, a local licensed contractor serving London and Southwestern Ontario since 2001, for current installed pricing estimates on the three jobs the grant covers:
- Backwater valve install: $2,800–$3,500 +HST
- Sump pit and pump, with sanitary disconnect: $5,100–$6,100 +HST
- Battery backup, supplied and installed: $1,689 +HST
Even with the grant covering up to 90% of eligible costs, you’re still on the hook for real money out of pocket, and the exact percentage and cap the City approves depends on your specific project and property. Get a quote from a licensed contractor first, then confirm your eligible amount with the City before you commit to the work.
What I can tell you without the data is this: a backwater valve or sump system, even partially grant-funded, does not make you insured. It reduces the chance of one specific failure. The endorsement is what pays for the drywall, the flooring, the furnace and everything you had stored down there. Prevention and coverage are two different jobs, and you want both.
What to actually do this week
Get your policy out — the declarations page, the first two or three pages. You’re looking for two specific line items:
- Something naming sewer backup or water and sewer backup
- Something naming overland water or overland flood
If either is missing, it isn’t there. It won’t be hiding elsewhere in the wording.
If both are there, check three more things: the limit on each, the deductible on each — endorsement deductibles are frequently higher than your policy’s main deductible — and whether the limit is a dollar amount or a percentage of your dwelling coverage.
And a word of caution I’d rather give you upfront: overland flood is not available everywhere. If your property sits in a mapped floodplain or a known high-risk area, an insurer may decline it, cap it well below what you’d want, or price it in a way that makes you think hard. That’s not a reason to skip the conversation. It’s a reason to have it before you need it, because your options are widest when nothing has happened yet.
Availability, limits, deductibles and wordings vary meaningfully between insurers. Two companies can use the same words and mean noticeably different things. That variation is most of what a broker is actually for.
Matt Santagapita is a Registered Insurance Broker with The Merit Group Insurance Brokers, RIBO Licence #67737, regulated by the Registered Insurance Brokers of Ontario. This column is general information about how coverage typically works in Ontario and is not advice about your specific policy or situation, nor a recommendation of any particular product. Coverage terms, availability and limits vary by insurer and by property. No coverage is bound until confirmed in writing by a licensed broker.
Not sure what’s on your policy? Send it over and I’ll read it with you — start a home quote or call 519-657-5500.
Keep reading
- Why London Basements Flood: What Local Homeowners Should Check Before the Next Heavy Rain
- Home insurance in London and Southwestern Ontario: the coverage guide
- How Much Homeowners Insurance Do You Actually Need in Ontario?
- Home Insurance Renewal Checklist Ontario: 12 Life Changes That Change Your Coverage
- Every Straight Talk on Insurance column
Frequently asked questions
What water damage does standard Ontario home insurance cover?
Typically sudden and accidental internal water escape such as burst pipes. Sewer backup and overland flood are excluded unless you add endorsements.
Is sewer backup the same as overland flood coverage?
No. They are two separate optional endorsements with different limits and deductibles; buying one does not give you the other.
How many Ontario homeowners have flood coverage?
A 2026 LowestRates survey cited in the article found 12% added at least one endorsement in 2025, though coverage is available to about 94% of homes.
Does London’s Basement Flooding Grant Program replace insurance?
No. It funds up to 90% of eligible prevention work like backwater valves and sump pumps, but does not cover resulting damage.
