Are you covered?
In Quebec, water damage is the leading cause of insurance claims, accounting for 50% of all compensation paid out.
With such large sums involved, it is only natural that insurers impose stricter rules regarding water damage. Many of these claims are related to defective water heaters.
If you woke up tomorrow morning to find that your water heater was leaking, would you know if you were covered? This article tells you everything you need to know about this issue.
Water damage: what your home insurance covers
When it comes to water damage, basic home insurance policies cover damage caused by faulty plumbing or appliances. It also covers damage caused by a broken public water pipe.
Other water damage, such as leaks caused by bad weather or sewer backups, is only covered by adding an endorsement to your basic coverage.
This means that damage caused by a leaking water heater is covered. But be careful, certain conditions apply!
A few rules to follow
A water heater has a useful life of several years. Many manufacturers even estimate that it lasts around 15 years. However, insurers will require you to replace your water heater after 10 or 12 years, depending on the company you deal with, whether your water heater is electric or gas.
Therefore, even if your water heater is still functional and efficient after 10 or 12 years, you will need to replace it in order to be covered in the event of a claim. To find out how old your water heater is, check the label on the side of the appliance.
Also, if your water heater is showing signs of age, be sure to replace it to ensure full coverage. How can you tell if your water heater is old? If you notice rust around the tank or if your hot water is discolored when it flows, it’s a sign that it’s time to replace your appliance.
If you notice signs of moisture on the outside of the tank, it may be cracked. This is another sign of aging.
Have you noticed that you can no longer enjoy a nice hot shower for as long as you used to? The element in your water heater must be reaching the end of its useful life.
If, when you file a claim, your insurer finds that your water heater is more than 10 or 12 years old (depending on their requirements), they may refuse to cover you for the property damage caused. They may also impose a hefty deductible of up to $5,000.
Savings… that could end up costing you dearly!
Installing a water heater may seem like an easy task to some. After all, it’s just a tank and a few connections. But your insurer may not see it that way!
In fact, some insurers require that your water heater be replaced by a plumber. Plumbers will comply with the standards set out in the Quebec Construction Code. They can also advise you on energy-efficient water heaters.
If you choose to do the replacement yourself, your insurer may refuse to cover you in the event of a claim or impose a deductible ranging from $500 to $1,000. You may also see a significant increase in your home insurance premium. In other cases, your insurer may refuse to renew your home insurance policy.
You might have saved on plumbing costs, but you wouldn’t have come out ahead in the end by doing the installation yourself.
Primary residence or secondary residence: what’s the difference?
The clauses surrounding water damage differ depending on whether it is your primary residence or your secondary residence.
For your vacation home or cottage where you visit regularly, the terms of your home insurance should be essentially the same as those for your primary residence.
However, if it is only a second home where you live for a few days a year, you will not be considered an owner-occupant. In this case, your insurance will be for seasonal cottages.
Basic coverage for seasonal home insurance covers fire, hail, lightning, and high winds. However, it does not cover damage related to burglary or vandalism, damage caused by wild animals, or water damage.
Also, if you own a rental cottage, your home insurance premiums may be higher, since the risk is also higher. Your insurer may require you to bundle your primary residence insurance with your rental cottage insurance.
A detector to save money
Some insurance companies will offer you a significant premium discount if you have a wireless detector near your water heater that shuts off the water supply in the event of a leak. This device can be very useful when you are away from home!
A drip tray with a valve connected to the nearest drain can also save you a few bucks.
Make your life easier!
All the information in this article may seem overwhelming. It’s therefore normal to feel apprehensive about shopping for home insurance. An independent insurance broker can advise you and find the home insurance that meets all your needs, whether for your primary residence or your cottage. This will ensure you have the right coverage against water damage.
You’ll save yourself a lot of headaches and be sure you’re well covered in case of damage. That way, you can keep singing in the shower and use up all the hot water as you please!