With the huge floods in Alberta the news now is starting to cover the issue of property damange and insurance.
We've never really thought a lot about insurance cover for flooding because it became a big issue in the UK about 5-10 years ago with limited land availability leading to building on flood plains and the eventual inevitable consequences and so when we bought over here we didn't buy anywhere that was a possible flood risk. Our choice seems to have worked out as we've been completely untouched by the recent issues but tragically, others have been less fortunate and apparently few people are covered for 'overland flooding' which is where water enters your house through doors and windows.
It's hard to really know what is fair. I understand the reason why insurers don't cover it and the arguments on both sides.
One one hand, we included the flood risk when puchasing a home. Why should we pay premiums for something we will never use for others to experience an idylic location on a river bank and be bailed out by everyone else? Kind of heartless but let's be honest - it wouldn't be fair. On the other, *not* being insured could really wipe someone out and insurers always seem keen to take premiums and more hesitant to actually provide meaningful cover for things. It seems like people should have the option of being insured at a reasonable price but paying more to reflect the increased risk.
The issue seems to be that unlike fire which is a risk for everyone with a home and so something that everyone contributes to and shares the risk of, flooding insurance is not needed by many and because they then don't purchase it the premiums go up for those that would need it to the point of it not being practical for all but the most paranoid.
There's also the issue of flood plains and rivers. They flood. Maybe not every year, maybe not every decade but most waterways flood at some time. Insurance typically covers risk such as the chance that your house might burn down but flooding is more of a "when" rathen than an "if", hence the lack of cover. When floods do occur then many more people are affected at once so it would be devastating to an insurance company and possibly too big of a risk to cover. For insurance to cover floods the price of the premiums would need to reflect the "when" which would end up being the actual price (thus making insurance the cost of a rebuild anyway).
However, you have to feel for peope who's houses have been flooded or even destroyed completely. Is that 'it' ... you're wiped out? Wanting to live in a nice house in a scenic location isn't a crime but then why should everyone else have to contribute to cover that who doesn't get to live there?
There is no easy or fair solution that I can think of ... does it just come down to personal tolerance to risk knowing that something 'might' happen and hoping that it doesn't?
Did you consider flood risk factors when purchasing a house? Do you have flood insurance?