Cape Breton flood damage may not be covered by standard insurance

Coverage depends on how water enters a home and what type of insurance people have

By David Burke, CBC News Posted: Oct 12, 2016 11:56 AM AT Last Updated: Oct 12, 2016 1:05 PM AT

As the water recedes, the headaches are just beginning for Cape Breton homeowners working to figure out whether their home insurance covers flooding. 

Whether or not someone has coverage all depends on how the water entered the home, said Liam Gillis, a lawyer with Sampson MacPhee in Sydney. He specializes in personal injury law and works with clients on insurance claims. 

• Cape Breton struggles to recover from flooding

If water came into a home through a sewer backup or if a sump pump was overwhelmed and could no longer pump water out, the damage might be covered, said Gillis. 

Coverage depends on policy

In most cases, Gillis said, people would have had to add such eventualities to their insurance in order to be covered. 

"I suspect, in this case, around Cape Breton there are many people dealing with sewage backup. I myself am one of them. That's an event that would be covered." 

"If it's seeping through the windows, that's a case where it's likely to be surface water and most basic home insurance policies don't provide coverage for that type of event."  

'It's uninsurable for this'

Curtis Sampson owns a rental property on Mechanic Street in Glace Bay. When flooding started the water flowed like a small river through his company house, a style of home originally built by mining companies to house workers.

"I'm insured for other perils, but not water, not sewer," said Sampson. "The fact that it's a company house and the structure and its value, it's uninsurable for this."  

Sampson has spent the day ripping out walls and flooring. He believes the house, which doesn't have a foundation has been undermined and may be a total loss. 

"I'm hoping there is going to be some kind of a relief fund of some sort that I'll be eligible for. It being a rental and me already having a safe place to live it's not the end of the world."  

Independent assessment a good idea

Gillis said regardless of people's coverage they should get a second opinion on what caused the damage to their home from someone other than their insurance company. 

"It's important I think that you also have it assessed by people independent from the insurance company such as disaster relief companies. It can be very difficult to identify the cause of an event or damage to a property."      

'Most people don't understand their own policies'

He said typically homeowners and their insurance adjusters can work together to reach a settlement. He said lawyers usually only get involved when there's a disagreement about how the damage occurred or the scope of it. 

• Cape Breton man describes efforts to flee flooded home

"At this stage, the most significant thing you see is … most people don't understand their own policies," said Gillis. 

"They're often very complicated, the wording can be very legalese for many people."   

Premier pledges support 

Premier Stephen McNeil was asked Wednesday how the provincial government could help people whose insurance may not cover flooding. He said: "We as a community will be standing with those families." 

"Together, we will deal with this issue and get individual properties back again as quickly as possible," he said. 

The province is applying for disaster relief money from the federal government to help the community.