Overland Water Endorsement and Climate Change

1024 605 PAIB Insurance Inc.

Water damage: is it caused by flooding? Or overland runoff? What is the source of the damage? Is it salt water, or fresh water? The differences may be minute, but the damages are just the same. Making a claim for water damage can open a can of worms but the details can be as subtle as the presence of salt in the water.

Overland water occurs when a sudden accumulation or run-off of surface waters – including torrential rainfall and spring thaw – overflows from a body of fresh water. On the contrary, Flood is the result of coastal flooding from salt water, such as in the event of a tsunami.

You’ve likely never heard of Overland Water, but it’s about to become a more familiar term. More and more insurance companies are adapting endorsements for this type of coverage, and you may be surprised to find out that climate change can have an effect on the frequency of these events. Over the last 60 years, changes in climate have resulted in higher temperatures throughout Canada, as well as an increase in precipitation of about 12%[1]. Some industries have had doubts when it comes to getting behind the science that warns that human activity is warming the planet, but the Insurance industry is an exception.

For centuries, the insurance industry has been a forecaster of risk, assessing the probability of incidents using evidence-based data and probability studies. It’s suggested that as far back as 1700, underwriters gathered in London to discuss the odds of cargo ships sinking[2]. With the dawn of enhanced technology in flood modelling, climate change is now factoring into new coverage endorsements like the Overland Water protection.

According to our partners at Aviva Canada, “based on weather patterns we have been experiencing in recent years, it is likely that we will see more of these incidents occurring”[3].  While predictions of the frequency and severity of overland water losses have become far more accurate, flood coverage is still one of those grey zones in the insurance industry. Determining a product and pricing for exposure is incredibly difficult when there are limitations in the ability to accurately assess and predict coastal flooding.

Coverage is available for owners or tenants of houses, condos, rental properties, seasonal properties or secondary properties. If you already have Sewer Back-up coverage, the Overland Water Endorsement would be an add-on to that feature. Pre-determined risk zones ranging from low, to medium, and high to very high will help you decide the level of coverage needed.

The Overland water endorsement goes beyond damage from river flooding to cover that resulting from sudden accumulation of water from events such as heavy rains or spring run-off. It’s something we’re likely to start seeing more often in the coming years with climate change becoming a significant factor.


[1] Government of Canada, Natural Resources Canada, 2015,

http://www.nrcan.gc.ca/environment/resources/publications/impacts-adaptation/reports/assessments/2008/ch2/10321. Accessed 19 April 2017.

[2] Don Pittis, Analysis: As climate change claims heat up, insurance industry says we need to

adapt, CBC News | Business, 2016,

http://www.cbc.ca/news/business/fort-mac-climate-insurance-1.3576918. Accessed 20 April 2017.

[3] Overland Water Q&A, Aviva Canada, avivapartner.ca.