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Houses on the banks of the Elbow River that flooded many houses last year in Calgary, Alberta on April 23, 2014.The Globe and Mail

A small Calgary firm is staking new ground in the insurance industry by offering city residents overland flood insurance, a service largely unavailable to other Canadian homeowners.

The residential insurance policy from the Beaufort Group, with Lloyd's of London, is limited to a small number of Calgary homeowners with premiums ranging from a few hundred dollars a year up to $18,000, or more, for the most expensive and flood-prone homes.

While the Beaufort Group usually deals with energy industry insurance policies, it was southern Alberta's devastating floods a year ago that motivated the company to create an overland flood policy for homeowners.

For chief executive officer Dougal Simpson, there are personal reasons; his daughter evacuated her home with her two children – ages 20 months and 13 days – in the middle of the night, and he has seen friends demolish their water-damaged homes.

"It's the same stories that everyone has had," Mr. Simpson said.

"For us, it's a focus on how we could help people here."

While most insurance policies cover sewer backup, Canada is the only G8 country where overland flood insurance – for damage caused when water enters the house through windows and doors – is not widely available to homeowners, according a study last year from the University of Waterloo.

The purpose of insurance is to spread the risk, and since only a small pool of Canadian homeowners want and need overland flood insurance, the numbers don't work unless premiums or deductibles are high. Another stumbling block is inconsistent and in some cases, inadequate, flood mapping across the country.

In Calgary, the Beaufort Group plan is designed for catastrophic overland flood events, of the type seen in Alberta in June, 2013, and covers single-family homes for damage to the building but not contents, with coverage up to $1-million. Premiums and deductibles depend on the value and flood-risk of the house. Homeowners must still maintain their regular homeowner's insurance.

But insurance broker Lee Rogers – who has long specialized in the Calgary inner-city neighbourhoods prone to flooding – said he doesn't believe there's going to be much take-up on the policy.

In searching for a quote for a client with a house worth more than $3-million, Mr. Rogers found Beaufort offered a policy with $1-million coverage, on the building only, with an $18,000 annual premium and a $100,000 deductible. Going directly to Lloyd's of London – and around Beaufort's offering – he was able to find a specialized policy with $1-million of coverage, including contents and building, at a yearly premium of $30,000 with a deductible of $250,000.

While anything is available if you're willing to pay for it, Mr. Rogers said his client declined to purchase either of the policies.

"Is it available? Not really en masse," he said of overland flood insurance. "And who's going to buy it?"

Severe weather claims are one of the insurance industry's biggest headaches, particularly in Western Canada. The floods from rivers in southern Alberta in 2013 resulted in $1.7-billion in business and residential claims. Insurance Bureau of Canada director Heather Mack said she believes the Beaumont Group policy is the only overland flood insurance provider in the country. She said other firms will wait and see whether the small-scale experiment to offer overland flood insurance works.

"Seeing somebody new come into the market in Alberta, and try something new, that is good news – that the insurance industry is still innovating," Ms. Mack said.

The Beaufort Group also has a separate overland flood plan for high-rises, and has plans to expand its reach to other communities once more computer modelling is complete.

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