October 7, 2025
Until recently, most insurance for homeowners and small businesses in Ontario did not cover damage from floods. This was because most policies contained exclusions stating that overland water damage was not covered.
With climate change there has been increased demand for insurance to cover flood risks and the insurance industry has responded with new policy wordings.
So, the answer to the question whether or not your insurance covers a flood damage is now “maybe”.
Why “maybe”?
Because policy wordings still vary for homeowners and business property insurance unlike automobile insurance where there is a standard policy. Different insurers have adopted their own wordings to extend or reduce damage due to flooding. Whether or not you receive coverage will depend upon the facts of your claim, and the wording of your policy. Therefore, there is no single answer to the question whether your insurance covers flood damage.
If you have a claim that involves flood damage, do not be surprised that your insurer may deny coverage. The general rules of interpretation for insurance policies provide that coverage wording should be interpreted broadly while exclusions should be interpreted narrowly. These rules are applied in court but frequently we see insurance companies doing the opposite- narrowly interpreting their own coverage wordings and broadly interpreting the exclusions.
Another rule of interpretation is that where there is an ambiguity, exclusions will normally be interpreted in favor of the property owner not the insurance company. This raises the question as to whether or not there is an ambiguity in the wording of the policy and how the facts apply to that wording. Not surprisingly, insurers were will very seldom concede that their policies are ambiguous.
What does this mean?
It means that if your insurer denies you coverage for flooding, you should not take the dial at face value. It is almost always worthwhile to consult an experienced insurance coverage lawyer on a flooding denial. Although the lawyer may ultimately tell you that the insurer’s position is correct, that will give you the Peace of Mind that is the reason you bought insurance in the first place. Without consulting any lawyer can you truly have this Peace of Mind?
Typically, a lawyer will charge you a modest fee to review the facts and the policy wording and provide you with an opinion. If your claim is very small in value, it may not be worthwhile. Unfortunately, flooding claims frequently lead to significant damages which make an initial consultation and opinion more than cost effective.
If the lawyer gives you an opinion that there may be coverage, you should then discuss with the lawyer an estimate of the cost of pursuing a claim against the insurer. Often, simply having a lawyer contact the insurance company and argue your case to the company will result in aid determination that there is coverage. If the insurer continues to deny coverage, you then have a second opportunity to decide whether or not suing is worthwhile.
With the pending increase in small claims court limits, almost all flood damage claims can be brought in small claims court. This means that you would have the opportunity to represent yourself rather than hiring a lawyer if you wish.
Because of the technicalities of insurance coverage, it is usually our recommendation for everything but the smallest claims that you hire a lawyer to make the technical legal argument on your behalf. The facts are often not in dispute which results in a short hearing at reasonable cost.
Before you even get to a hearing, a lawyer will be of assistance at the settlement conference in attempting to resolve the issue with the insurance company either through compromise or the insurance company being convinced by the settlement conference judge that they should pay all or most of your claim.
If the claim does not settle, and you proceed to trial, your exposure to the costs of the insurance company if they are successful is modest-almost always less than 15% of the amount of the claim-so if you have obtained a legal opinion that you have a strong case, even though there are no guarantees of success, it is often worth while bringing the case to court.
WHAT WEILERS LLP CAN DO TO HELP YOU
At Weilers LLP, we have experience dealing with lawsuits of most sorts. We have experience reading insurance policies and know insurance law. If you have damage to your property, or are sued by someone else, we can give you the advice you need. If you require help dealing with your insurer, you may give us a call at Weilers LLP. We do not help you for free, but our fees are often a sound investment. If we cannot help you economically, we will let you know. We may be the right lawyers for you.