Updated October 2026

Water damage is now the number one cause of claims for Ontario homeowners. The amount of damage can be so devastating that it’s prudent to know what’s covered by your home insurance policy. Many people just assume they have coverage but there are many different kinds of water damage and not all of them are covered.

In general, policies only pay for the accidental and sudden escape of water. This includes a burst pipe, overflow from a toilet or sink or a broken hose to a washing machine.

Types of water damage not covered include:

Leakage and seepage through the basement walls (this is seen as a maintenance issue)
Walter infiltration
Water escape from freezing pipes, unless certain conditions of the policy are met
Sewer backup (you may purchase this coverage separately)
Flood or Overland Water (you may also purchase this coverage separately)
Rain entering through an open window or door

Note that insurance is not a maintenance contract. It’s not designed to respond to water damage caused by gradual wear or tear, lack of maintenance or a continual event. Examples of these would be:

Leaking faucets or pipes causing damage to walls, ceilings or floors.
Leakage and seepage through the basement walls or foundation
An aging roof that is deteriorating, showing signs of wear and needs to be repaired
Mold, rot or corrosion
Losses resulting from a general physical deterioration of the structure

Homeowners may think that since they are seeing the damage for the first time it should be covered, but often the damage is the result of something

Are You Covered for Water Damage? What Ontario Homeowners Need to Know

Updated October 2026

Water damage is one of the most common and costly types of insurance claims affecting Ontario homeowners.

Whether caused by a burst pipe, sewer backup, heavy rainfall or melting snow, water can cause extensive damage to your home and personal belongings.

Unfortunately, many homeowners assume that because they have home insurance, they are automatically covered for all types of water damage.

The reality is that not all water damage is covered, and the source of the water can make a significant difference in how your insurance policy responds.

At L.D. Dermody Insurance Brokers, we encourage homeowners to understand their water damage coverage before a loss occurs.

What Types of Water Damage Are Typically Covered?

Most home insurance policies provide coverage for certain types of sudden and accidental water damage.

Examples may include:

A water pipe unexpectedly bursting inside your home.
A washing machine hose suddenly breaking and releasing water.
A plumbing fixture overflowing accidentally.
A sudden escape of water from a covered plumbing or heating system.

However, coverage depends on the circumstances of the loss and the wording of your particular policy.

For example, if a pipe bursts because of freezing temperatures, your insurance company may require that certain precautions were taken while your home was unoccupied.

The important distinction is that insurance is generally intended to respond to sudden and accidental losses, not damage that develops gradually over time.

What Types of Water Damage Are Typically Not Covered?

There are several common situations where homeowners may discover that their insurance does not provide coverage.

These can include:

Water gradually seeping through basement walls or foundation cracks.
Damage resulting from ongoing plumbing leaks.
Water entering because of deteriorated roofing materials or poor maintenance.
Damage caused by rot, corrosion or gradual deterioration.
Water entering through an open window or door.
Sewer backup or overland flooding when the appropriate optional coverage has not been purchased.

Some of these losses may be covered under specialized endorsements, depending on the insurance company.

It is important to remember that home insurance is not a maintenance contract.

If a pipe has been leaking behind a wall for several months, the damage may not be covered simply because you only recently discovered it.

Sewer Backup Coverage

Sewer backup is one of the most important optional coverages Ontario homeowners should consider.

A sewer backup occurs when water or sewage flows backward through the drainage system and enters your home.

This can happen when municipal sewer systems become overwhelmed during heavy rainfall or when blockages prevent wastewater from draining properly.

Sewage may enter through basement floor drains, toilets, sinks or other plumbing fixtures.

The resulting damage can be extensive, particularly when finished basements, flooring, drywall, furniture and personal belongings are affected.

Sewer backup is typically not covered under a standard home insurance policy unless the appropriate optional coverage has been purchased.

Coverage may also extend to certain sump pump or septic system losses, depending on the insurer's wording.

Limits, deductibles and exclusions vary between insurance companies.

Overland Water and Flood Coverage

Overland water coverage is another important protection for Ontario homeowners.

This coverage generally addresses certain situations where water accumulates on the surface of the ground and enters your home from outside.

Examples may include:

Heavy rainfall causing water to accumulate and enter through a basement window or doorway.
Rapid snowmelt creating surface flooding.
Overflowing rivers, lakes or other bodies of freshwater.
Surface water flowing toward your home during a severe storm.

Overland water coverage is generally optional and may not be available for every property.

Homes located in areas considered to have a high flood risk may face higher premiums, reduced coverage limits or restrictions on availability.

Some insurance companies combine overland water and sewer backup protection into one coverage package, while others offer them separately.

Groundwater Coverage

Groundwater is water located beneath the surface of the ground.

During periods of heavy rainfall or rapid snowmelt, the groundwater level can rise and place pressure against a home's foundation.

Water may then enter through basement walls, foundation cracks or floors.

Traditionally, groundwater infiltration was excluded under many home insurance policies.

Today, some insurance companies offer optional coverage for certain sudden groundwater events, sometimes as part of a broader water damage endorsement.

However, coverage varies significantly.

Gradual seepage or repeated water infiltration may still be excluded, even when some groundwater protection has been purchased.

Homeowners should not assume that having overland water coverage automatically means they are protected against every type of groundwater loss.

Water and Sewer Service Line Coverage

Another optional coverage worth considering is protection for underground water and sewer service lines.

Homeowners may be responsible for repairing or replacing portions of the underground service lines connecting their home to municipal systems.

If an underground pipe breaks, collapses or otherwise fails, the cost of excavation, repairs and restoration of the property can be substantial.

Some insurance companies offer service line coverage that may help pay for these expenses when the damage results from an insured cause.

This coverage is different from sewer backup insurance.

Sewer backup coverage addresses certain damage caused by water or sewage entering the home, while service line coverage addresses eligible damage to the underground pipes themselves.

Does Your Water Damage Coverage Have a Limit?

One important detail homeowners sometimes overlook is that optional water damage coverage may have a limit that is lower than the overall amount of insurance on their home.

For example, your home may be insured for several hundred thousand dollars, but your sewer backup coverage could have a separate limit of $25,000 or $50,000.

A serious basement flood involving flooring, drywall, electrical systems, furniture and personal belongings could easily result in damage exceeding a relatively low coverage limit.

Water damage endorsements may also have separate deductibles.

When reviewing your insurance policy, it is important to consider not only whether you have the coverage, but also how much coverage you have and what deductible applies.

What About Water Damage From a Leaking Roof?

Roof leaks are another common source of confusion.

If a windstorm suddenly damages your roof and rain enters your home, the resulting interior damage may be covered, subject to your policy conditions.

However, if water enters because the roof has deteriorated over time or shingles have not been properly maintained, the resulting damage may not be covered.

Insurance companies will consider the cause of the damage when determining whether a claim is payable.

This is one reason regular roof inspections and maintenance are so important.

How Can You Reduce the Risk of Water Damage?

Although insurance provides important financial protection, preventing water damage is always preferable to dealing with a claim.

There are several steps homeowners can take to reduce their risk.

Install a Backwater Valve

A properly installed backwater valve can help prevent sewage from flowing backward through your home's drainage system.

Some municipalities offer financial assistance programs to help homeowners with installation costs.

Maintain Your Sump Pump

If your home has a sump pump, inspect and test it regularly.

Consider installing a battery backup system to help protect your basement during power outages.

Keep Eavestroughs and Downspouts Clear

Remove leaves and debris from eavestroughs and ensure downspouts direct water away from your home's foundation.

Check the Grading Around Your Home

The ground surrounding your home should slope away from the foundation to help prevent water from accumulating against basement walls.

Inspect Plumbing and Appliances

Check washing machine hoses, plumbing connections, water heaters and other equipment for signs of leaks or deterioration.

Protect Your Basement Belongings

Avoid storing valuable items directly on basement floors.

Use shelving or waterproof storage containers where possible.

Take Precautions During Extended Absences

If you are leaving your home unoccupied during the winter, review your insurance policy's heating and water shutoff requirements.

Failure to meet these conditions could affect coverage for certain freezing-related losses.

What Should You Do if Water Damage Occurs?

If you discover water damage in your home:

Make sure everyone is safe. Avoid entering flooded areas where electrical hazards may exist.
If it is safe to do so, stop the source of the water.
Contact your insurance broker or insurance company's claims department as soon as possible.
Take photographs and videos of the damage before beginning cleanup.
Take reasonable steps to prevent further damage, where safe.
Keep receipts for emergency repairs, cleanup and other related expenses.
Avoid permanently disposing of damaged property until you have documented it and discussed the next steps with your insurer, unless immediate disposal is necessary for safety.

Your insurance company can explain the claims process and arrange for an adjuster or restoration contractor where appropriate.

Review Your Coverage Before a Claim Happens

Water damage insurance has changed considerably over the years, and the protection available today can vary significantly between insurance companies.

Two homeowners with similar houses may have very different coverage depending on their insurance policies and the optional endorsements they have purchased.

At L.D. Dermody Insurance Brokers, we encourage our clients to review their water damage coverage regularly.

Some important questions to ask include:

Do I have sewer backup coverage?
Is overland water or flood coverage included?
Does my policy provide any groundwater protection?
What are my coverage limits and deductibles?
Do I have coverage for underground water and sewer service lines?
Are there any exclusions or restrictions I should know about?

The best time to discover a gap in your insurance coverage is before water enters your home, not after.

If you are unsure what water damage protection your home insurance policy provides, please contact L.D. Dermody Insurance Brokers.

We would be pleased to review your coverage and explain the options available through your insurance company.

This article provides general information about water damage insurance in Ontario as of October 2026. Coverage availability, limits, deductibles and exclusions vary by insurer and are subject to the terms and conditions of the applicable insurance policy.