VANCOUVER, July 4, 2013 /CNW/ - As the flood waters recede in many areas across Alberta, the long process of recovery begins. Experts estimate damages from the floods will total as much as $5 billion. The cost of these damages will be borne by:
Municipal, provincial and federal governments;
Insurance and reinsurance companies; and,
Individual businesses and residents.
At this point the proportion of damages each party will incur is unclear. Understandably, this is particularly unsettling for individual businesses and residents. What's more, many businesses and residents are struggling to understand what insurance policies cover. That's because each class of insurance treats flood damage differently. Protection against flood damage can be added to most commercial insurance policies purchased by businesses, condo corporations and farms. Similarly, protection against flood damage is typically included in the comprehensive coverage option available under most auto insurance policies. On the other hand, flood damage is specifically excluded from most home insurance policies in Canada. Government assistance programs exist for homeowners and tenants suffering flood damage. It's important to note that flood damage is distinct from water and sewer backup damage. Most home insurance policies provide some form of protection against water and sewer backup damage. In some cases, you may need to specifically add, and pay for, this protection. Adding to the confusion for homeowners and tenants is the fact that seemingly similar home insurance coverages, like sewer backup protection, can differ by company. For example, some policies exclude loss or damage caused both directly and indirectly by flood. If your policy excludes damage caused indirectly by flood, then you may not be protected against sewer backup damage even if no flood waters entered your home. That's because the sewer backup damage was indirectly caused by flood. So, what should you do if you've suffered flood damage? The first step is to file a claim with your home insurance provider. You should do this even if you suspect your claim may not be covered based on what you've heard from others. As mentioned earlier, each insurance company offers different coverage. Even if both you and your neighbor are insured by the same company, your policy may be different. For example, you may have added sewer backup protection to your policy whereas your neighbor may not have. Your claim will be assessed based on your policy and situation.