Often, the first question that homeowner’s ask us here in Toronto is whether homeowners insurance will cover the cost of repairing their leaky basement. The second question is whether insurance will pay to replace their lost items or repair their damaged ones. The answers vary and it is always best to check with your individual insurance policy and your insurance agent but there are some important tips to consider to see if your insurance covers a basement leak.
It’s also very important to document everything from the start with images as well as written testimony. It’s also critical to understand what caused the water leak and to be very clear in explaining it to the adjuster who may come to your home to file a report. We get called out on many potential insurance claims as the homeowner needs to understand what happened and to have it documented for the insurance company. Sometimes simply doing a poor job explaining what happened or giving bad information can lead to a rejected claim, even though it may have been valid. Be careful how you explain what happened!
Evaluate Your Home’s Risk
If you have a past history of water coming in to your basement and never had the issue repaired by either yourself or a waterproofing company, the likelihood it will leak again is high. Once water finds a path into your home, it will come in again. We often hear comments from people who say it only leaks during periods of heavy rain or sustained rains (more than a couple hours). Water finds the path of least resistance also, so if you only repaired part of the leak, i.e. patched one crack in the wall, it will travel to the next weak spot. Another thing to consider is that long dry periods followed by rain is a kind of like the weather is creating the “perfect storm” for your home. Soils shrinks during long, dry periods and that provides more opportunities, more avenues, for water to come in.
If you are considering purchasing, your home inspector will look for symptoms/signs of previous leaking. If you notice stained boxes or walls with mold or a white powdery substance called efflorescence or you smell a damp, musty odor, those are all signs they home may have a past history of leaking in the basement or dampness. If you suspect serious foundation issues, it is wise to call in a foundation contractor like Nusite to perform an additional inspection as it will beyond the scope and experience of a home inspector.
Inspect Your Leak’s Location
Where or how did the water come in? If it came in through a leaky hot water heater located in your basement or a burst water pipe, this is different than a leak from outside. It is always best to check with your agent to see the particulars and causes for flooding. It does get cold enough in Toronto for your water pipes to freeze if they are not properly insulated and even when they are, they can still freeze. Talk to your agent before you have a problem so that you are knowledgeable. A waterproofing professional can provide an estimate for repair for outside water leakages but typically cannot repair a leak from plumbing or above. Your agent may ask for more than one estimate for repair to be provided to them.
Determine a Solution
Whether your insurance company pays for the repair or doesn’t, it’s important to repair the leak for a couple reasons. As we’ve mentioned before, once the water comes in, it will come in again. Talk with a waterproofing professional and decide the best way to repair your problem. The least expensive repair may only fix your problem temporarily and the most expensive repair may not be any better than the lower priced one. If your leak is coming over the top of the wall, no matter how much time and expense you put into an interior system, unless you fix the grade outside the wall, it will continue to leak.
Getting a second opinion is also part of the insurance process; you wouldn’t get your car repaired following an accident without getting more than one estimate so why does it with your home. If your homeowner’s insurance does pay for the repairs they may only pay a certain amount. Don’t let the insurance amount dictate what you pay or who you pay. As a homeowner, educate yourself in terms of the options and what is best for your specific situation. Patching a crack won’t stop water coming in under the footer and onto your basement slab.
Limit Your Liability/Reducing Risk
In the waterproofing business, this is a no brainer but for most homeowners, they don’t think about it. The best way to limit your liability is: don’t finish your basement without addressing waterproofing. No matter what the right choice is for your basement situation, whether its exterior waterproofing, interior waterproofing, cracks injections or even adding a dehumidifier, fix it before you finish. It is all too common for waterproofing companies to get calls with heavy rains where the homeowner says I just finished it and now it’s leaking. Just because your home hasn’t leaked in the past doesn’t mean it’s immune from leaking in the future.
Contact a licensed and properly insured, professional waterproofing company and have them check your basement before you finish. A good analogy when thinking of whether your home will leak in the future is to think of it as a snapshot in time. Your waterproofing professional can only tell you whether it’s leaked before, it’s leaking now or if there are signs of failure in the near future.
When storing items in your basement, don’t place them right up against the wall, even if there’s not an active leaks, moisture can wick through the walls and cause damage to your items. Also, if it does leak, many homeowners’ only experience minimal leaking where it only comes in a foot or two. Keeping items away from your walls can help limit the damage.
The best way to insure you don’t ruin your newly finished basement is to pro-actively finish. Even if you don’t get an active leak, mold can cause heavy damage to your sheet rock and your valuables. Basements are notorious for humidity and mold issues. Consider a whole house dehumidifier for your home. A waterproofing or HVAC company can install it and route the condensation it collects outside your home, making it as convenient as possible. Nothing worse than having to empty the pan from your store bought dehumidifier constantly.
Flood Insurance, in Canada, is a hit or miss proposition. The standard contract recommended by the Insurance Bureau of Canada does exempt floods from insurable damage. On the other hand, there is nothing that stops and individual insurance company from writing a policy that includes flood damage for their customers. Commercially, flood insurance is sold to businesses in Canada.
It is best to check with your insurance company to see if it is something they offer. In other countries such as the United States or the U.K., both flood programs are as a result of government intervention. Most homeowners in Canada mistakenly believe they have flood insurance and they don’t. It is always best to read your policy thoroughly and speak with your agent. Be well advised. Before purchasing your dream home, find out if your home has been designated as a flood plain.
What Happens If the Basement Leaks?
Us waterproofing companies like to say there are two kinds of basements, the kind that leak and the kind that will leak later. Odds are, your basement will leak at some point if you don’t pro-actively take care of your basement. With that in mind, the best advice is simply to talk to your agent. Find out the what ifs. What if it leaks? What if my walls and carpet are ruined? What about mold? What if I lose my stored belongings?
Most waterproofing companies can provide you with an estimate to share with your agent in the event of flooding but they can’t promise you insurance will pay for the repair. Don’t assume it’s covered, do your homework now, before something happens. A little work and research now can save you a big headache later.
Have questions about your leaky basement? If you live in Toronto or the GTA, contact us here for a free in-home inspection and estimate.