7 home insurance loopholes to know before weather strikes

Thursday, April 30, 2015, 2:33 PM - When it comes to the severe weather, Canadians have seen it all. After a harsh winter that cost billions of dollars in clean-up and storm damages in North America, an active spring and summer season is next, which for many homeowners means insurance claims.

While home and cottage insurance can help offset some of the costs associated with repairing a storm-damaged home, it's important to understand what policies cover – and what they don't – before making a claim.

Owning a policy that includes coverage for storm damage doesn't necessarily mean every claim will be accepted.

Here are seven things you may not know about weather-related home insurance policies.

RELATED: Over 4,000 cars destroyed by Nebraska hail storm

1. FLOOD DAMAGE

Living in a flood-prone zone may make a home ineligible for flood insurance – but living outside of a flood area doesn't necessarily ensure coverage.

"Buyers need to be aware that houses may be deemed to be a flood risk despite not being near water," says Garth Macdonald, a student-at-law at Delaney’s Law Firm in Ottawa, Ont.

"Each insurance company determines which areas are at risk. Categories like 'flood plain,' 'susceptible zones,' and 'fringe flooding areas' will affect insurability, rates, and policy riders." Macdonald recommends finding a local, knowledgeable broker to help select the right flood policy and riders.

Photo taken during the historic floods in southern Alberta in June 2013. The incident is one of the costliest natural disasters in Canadian history at $1.7 billion.

2. RENOVATIONS

If you plan to renovate your home or cottage, consider an update to your insurance policy. 

"A big reason someone may not be covered is because of recent home remodels," says John Bodrozic, co-founder of Homezada.com, a digital home information platform. "Many people remodel their home [with a] new roof, kitchen, or bathroom, etc. and they have not updated their insurance company with the new remodels they have done."  

3. EMPTY HOMES

Some insurance companies will deny weather-related claims if the damage is sustained while the homeowner is away, even if the company is notified beforehand, Macdonald says. "Many companies say four days is the maximum a house can be unoccupied and still be covered." The best course of action is to talk to your broker prior to a lengthy vacation. In some instances, additional riders can be purchased to help extend coverage.

"Turning off the water and having someone check that the heat is on could make the different in being covered or paying out of pocket," Macdonald adds.

4. WIND DAMAGE

Tornadoes can be dangerous and costly, and they aren't covered by many standard homeowner's insurance policies.

In many cases, windstorm damage coverage must be added to an existing policy or a separate policy may needed.

"It is normally very expensive and has a large deductible," says Todd J. Stabinski, a lawyer based in Florida, a hurricane-prone zone where many Canadians have vacation homes.

"Insurance companies can deny coverage if you fail to protect your property from further damage," he adds. "For example, board up that window damaged by the storm. But you are only required to do what is reasonable, safe, and within your means."

RELATED: 'Mild' hurricane season doesn't mean 'not destructive'

5. WATER DAMAGE

"The 'Insured Perils' section of your policy will tell you what kind of water damage is covered," Macdonald says.

"Water damage from the immediate effects of a storm will likely be covered but damage from a longer-term leak in the roof will not." 

Still, experts are quick to point out that many policies will not cover water damage caused by a leaky roof or faulty windows, unless the leaks were caused by a storm. Regular roof and window maintenance can go a long way towards ensuring coverage.

6. SNOW DAMAGE

Homes in areas prone to heavy snowfall may not be covered for snow damage, so experts recommend checking a policy carefully for snow coverage prior to purchasing. Areas where frozen precipitation is common may have different stipulations, or require a separate policy altogether.

Nova Scotia is known for its heavy snowfalls. In February, a parade of intense storms cost the city $66.5 million in snow removal -- $9 million over budget.

7. COTTAGE INSURANCE

Cottage insurance is variable and depends on how the cottage will be used. For example, a cottage that is used as a rental property will require a different policy than a cottage that is used as a family vacation home. If an insurer discovers the property is being used in a way that isn't stipulated in the policy, coverage could be denied. It's also important to find if cottage property is covered in the policy. "Check to see if your boat, for example, needs to be in an enclosure or can be left outside," Macdonald advises.

BOTTOM LINE: It's best to review your policy with a professional insurance broker before active weather strikes. Make sure your policy is up-to-date and any areas of concern are addressed prior to making a claim.