What Is Sewer Backup Coverage And Why Do You Need It?

Sewer backup is perhaps the most important element of coverage in your home, tenant insurance or condo insurance policy. But do you even know what it is?

The staff at McDougall Insurance go to great lengths to ensure that the policies we write all carry sewer backup (known as SBU) coverage, but sometimes just recommending the coverage isn’t enough.  

Although you may, or may not, currently have sewer backup coverage on your policy, knowing about the endorsement is a keyway to ensure that you are exposing yourself to an acceptable amount of risk, and getting the most out of your policy. Like Sir Francis Baron says, “Knowledge is power” (he would have been a big fan of Insurance Brokerages). 

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Sewer Backup Coverage Definition 

Sewer backup is an extension to your regular home, tenant or condo insurance policy, which will pay for damages to your home done by, well, the sewer system backing up.  

Sewers can backup during periods of heavy rainfall, when the city sewer system can simply not handle excess water, causing it to overflow into your home. This water emerges from your plumbing, and can wreak havoc on your property, especially on lower floors or basements. It also usually smells horrible. 

Insurance can do nothing to protect you from the smell, but it also experiences issues protecting you from the water. The problem with water damage, and the reason you need sewer backup, is because pretty much all forms of water damage are excluded from your default habitational policy.  

There are several exceptions to this rule, but it is very hard to get a claim paid if it’s caused by water. Adding sewer backup coverage rectifies this, making it so that water damage from sewers is no longer excluded, and allowing you to make a claim if you basement is damaged by a backup. 

These types of claims are extremely common; especially around areas with a low water table and periodic, heavy, episodes of rainfall (a lot of Eastern Ontario fits this description). That alone should be enough motivation to purchase this coverage, but like so many other critical but small parts of insurance, it also costs a fraction of your main habitation policy.   

And that is McDougall Insurance’s logic behind constantly pushing sewer backup to our consumers. Inexpensive and useful is a really good combination, one which we feel is too good for our customers to pass up. 

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What Does Sewer Backup Insurance Cover?

Claims involving sewage are not included in standard home insurance policies. You can add sewer backup coverage to your policy to cover damage to your home or contents caused by sewer backup.  

These are just a few examples of situations that may be covered under sewer backup coverage. 

• Backup or discharge from storm drains, septic tanks, or sewers 
• Incident damage caused by sewer backups includes the cost of replacing flooring and walls or cleaning them up. 
• Overflow from a sump or sump pump or any other related equipment 

To confirm your coverage, always check with your broker or your policy wording. 

How Much Sewer Backup Coverage Do I Need?

For help on deciding how much coverage you need, ask these questions: 

• Are there any water backups that your home has suffered in the past? Was your home subject to water backup losses in the past? If so, how much was paid? 
• Are you able to access your basement? Is the basement finished? What size is the finished areas? 
• What flooring and wall material do you want in your basement? 
• What size bathroom is there in your basement? 

• Is your basement equipped with HVAC equipment, water heaters, or washer and dryer? 

If you take all the details into consideration, you should be able to determine how much water backup coverage you require. 

You might consider a lower limit if your basement is not finished with high-end finishes. If your basement features high-end flooring or wall finishes and a fully finished bathroom, you may want to increase your limits. 

Read more: Water Coverage: What Homeowners Need to Know

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Disadvantages of Sewer Backup Coverage 

Now that’s not to say that sewer backup is the perfect coverage, and there are several snags that you should remain aware of.  

The first issue is that insurance companies pay very close attention to sewer backup coverage, as they spend a large amount of money in handling sewer backup claims every year.  

Because the amount they have been paying out is so high, many companies have imposed special limits or conditions upon the policies, to reduce the amount they need to pay.  

A good example is Intact Insurance, who forces a $2000 deductible onto any sewer backup claim you might have, regardless of the deductible on the rest of your policy (which is typically much lower).  

The best way to know what conditions are placed on your policy is to ask your broker, who will know the specifics regarding your insurance company. 

Another drawback is that sewer backup is not available in certain areas that have a high risk of flooding, and that sewer backup does not provide coverage for any other types of water damage, like a flood.  

Flood coverage or overland water protection is a separate coverage you must purchase. If you would like to learn more about water coverages, and possible extensions to improve you policy, you should speak to your broker.  

Read more: 4 Tips to Protect Your Home from Floods During Spring Melt

Sewer backup coverage stands as a pivotal component within your standard home insurance policy. Yet, do you grasp its significance? The answer is clear: You indeed do. With adequate insurance, your finances can remain safeguarded, ensuring stability even when the lower sections of your home are inundated.

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Do you have questions about sewer backup coverage? Just ask Eric The Intern!