Peterborough floods a model for insurance

It was a scene Derek and Helen Carroll of Peterborough will never forget.

An eight-hour record rainfall on July 15, 2004 prompted the retired couple to return from their cottage to make sure everything was all right at home.

It wasn't.

About five feet of water – backed up from the local sewer line – had filled their finished basement, destroying walls, carpets and furniture.

"It was awful, that's all I can say," says Derek, who lives on Philip St. "This entire part of the city was affected. The storm touched everyone."

He reflects on the event and says a lot of people – who weren't properly insured – lost a lot of money having repairs and furniture replaced.

But thanks to his request for a policy that covered sewage backup, his basement was repaired and new furniture purchased at no personal cost.

"There was an adjuster there within a matter of hours," said Derek, who purchased the policy from Royal and Sun Alliance. "They were excellent, they jumped right on it."

Irene Bianchi, vice-president of claims and corporate services for Royal and Sun Alliance, says home insurance is a given these days, but that homeowners have to be aware of "exactly" what is covered.

She cautions that the concept of flooding is confusing to many homeowners and that it can be difficult, if not impossible, to find a policy that covers damage from runoff water if it enters through windows or other external openings.

On the other hand, many insurance companies offer packages that will cover damage from sewer backup, as in the case of the Carolls.

Home insurance can cost anywhere from $500 and $1,500, depending on your home and its contents.

"It's very, very important to sit down with a broker to get all the facts ... ask specific questions, find out exactly what is offered and what you can get," said Bianchi. "The broker can make suggestions or help in areas the homeowners just don't understand."

As a matter of fact, Bianchi says the insurance broker should be an active on-call service – not unlike a lawyer – that is kept informed of any changes in the house, such as a new kitchen, to make sure the family is covered.

"You should have enough coverage to make sure you can put everything back in place in case of something as serious as a fire," she says. "You really should keep an inventory of everything, including brand names."

Most industry spokespeople say it costs about $200 to $250 per square foot to construct the average house these days.

Bianchi suggests creating a video or taking still photographs of the contents and layout (showing major renovations or installations). And make sure the images are kept in a safe, off-site spot, such as your office or a relative's home.

Title insurance – which can be purchased through lawyers – protects the new homeowner from situations such as after-closing fraud, the lack of building permits for additions by former owners, or faulty renovations.

For more information, see the insurance industry's website at ibc.ca