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An aerial view of the flooding in the Bird's Point area of Round Lake in Saskatchewan on Sunday, July 6, 2014.The Canadian Press

As destructive storms become more frequent and severe in Canada, one insurance company will offer a new kind of protection against the country's most common source of claims: flooding.

Property and casualty insurer Aviva Canada is preparing to introduce a home insurance product that would protect owners from costly damage caused by intense rainfall and rising rivers or lakes. This type of water insurance has historically been available almost exclusively for commercial properties.

"We think there's significant consumer demand for a product like this," said Sharon Ludlow, president Aviva Canada, adding that brokers across the country say customers have been asking about this coverage.

The new policies are, in part, a response to the devastation caused by catastrophic weather events in 2013. A summer storm in Alberta that ravaged thousands of homes became the costliest natural disaster on record in Canada with $1.7-billion in insured damages.

The insurance industry was in the spotlight when a conflict between some companies and their policy holders erupted during the recovery effort in Alberta. Many homeowners thought they had insurance that would protect them against water damage, but that wasn't always the case.

While home insurance policies often cover sewage backup, they have not historically covered the overland flooding. And unlike some countries, there is no national flood program in Canada.

In Alberta, these two types of damage occurred simultaneously in some areas. This left it up to insurance adjusters to assess and interpret both the evidence and the wording in each individual policy.

With Aviva's new insurance, both of these damages would be covered. The only kind of water damage not covered is coastal flooding, including tsunamis or tidal waves.

"I would think that the events in 2013 were a catalyst for awareness – we've certainly, over the last years, seen increased claims and frequency from water damage," Ms. Ludlow said.

Aviva used the improved flood maps developed in recent years as well as other technology to identify and categorize the risk of water damage to homes across Canada. The insurer then categorized the dwellings in one of four risk levels. By this measure, about 95 per cent of the country is insurable. Still, 5 per cent of the country is categorized as very high risk and cannot be provided coverage. Ms. Ludlow said Aviva is working with governments to explore options for these outstanding homes.

The new policies will be launched in Alberta and Ontario in May this year. Other provinces will be able to buy this insurance by the end of 2015. How much the policies will cover, and what they will cost to buy, will depend on the value of the home and the risk ranking.

Ms. Ludlow expects other insurers to take note. "I wouldn't be surprised if other companies see this announcement and give them a sense of urgency to also react," she said.

Insurance claims related to natural disasters reached an all-time high of $3.2-billion 2013 after floods, hail and ice storms damaged homes and businesses across the country, according to the Insurance Bureau of Canada (IBC). While the costs were not as steep in 2014, the multiyear trend indicates natural catastrophes are on the rise .

The IBC says that it is encouraged by insurers offering new products that meet consumer needs.

"The flooding has been a wake-up call. We think there should be a higher level of awareness from home and business owners," said Steve Kee, spokesman for the IBC. "We've talked about the weather events that are happening more frequently, and the need for consumers to understand the coverage."

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