Allstate Insurance Company of Canada has reported a sharp increase in water-related home insurance claims in 2025, warning that many households remain unprepared for escalating flood and heavy-rain risks.
New claims data from the insurer showed home insurance claims caused by water from external sources, which includes heavy rain, overland flooding and sewer back‑up, rose 94% in 2025 compared with 2024. Losses from external water accounted for nearly a quarter (24%) of all home insurance claims last year.
Looking at the longer term, water damage represented more than 40% of all home insurance claims handled by Allstate Canada between 2021 and 2025. External water sources were responsible for almost one‑third (31%) of all water‑related claims over that period, underlining the growing impact of severe weather on property portfolios.
Risk awareness not translating into prevention
Despite the claims trend, a Léger survey conducted for Allstate Canada suggested a significant gap between concern and action among homeowners and renters.
More than half of Canadian respondents (53%) said they do not plan to take any steps to protect their homes from flooding this spring. A further 34% reported that they are worried about flooding, yet still plan to do nothing.
Among the 47% who do intend to take at least one preventive measure, the most common step cited is clearing gutters and drains themselves (26%). Only 17% of those planning preventive action say they intend to hire a professional, suggesting many households may be underestimating the level of intervention needed as weather‑related risks intensify.
“Water damage is one of the most common reasons Canadians file an insurance claim, making prevention no longer optional, but essential,” said George Ljubicic, agency manager at Allstate Canada. “What we’re seeing is that many Canadians recognise the risk, but we’re reminding them how important it is to take concrete steps to protect their homes. Small actions taken early can make a meaningful difference before the spring thaw.”
Coverage uncertainty and optional flood protection
The survey also highlighted gaps in insurance literacy. One in four respondents said they are unsure whether their home insurance policy includes cover for flood‑related damage.
Allstate noted that overland water and sewer back‑up cover remains optional on many home insurance policies, meaning customers may not be protected against some of the fastest‑growing sources of loss unless they have actively added endorsements. The carrier is urging policyholders to review their cover before an incident occurs, rather than after a claim is declined or limited.
For insurers and brokers, the figures reinforce both sides of the water‑risk challenge: rising claims severity and frequency on one hand, and widespread under‑insurance or misunderstanding of policy terms on the other.
Practical steps ahead of spring thaw
Allstate Canada is using the findings to push a pre‑emptive risk‑management message ahead of spring, encouraging both homeowners and renters to act now. It is advising customers to review their insurance policies so they understand which types of water damage are covered and whether optional overland flood or sewer back‑up protection is in place.
Homeowners are also being urged to keep water away from their foundations by cleaning gutters and downspouts and ensuring downspouts extend 2 to 3 meters from the home. The insurer is also recommending that households prepare drains and sump pumps by testing equipment while clearing debris from floor drains and window wells so water can flow freely.
For tenants, Allstate stressed the importance of communicating early with landlords by reporting leaks, standing water or drainage problems as soon as they appear, so that minor issues do not become major claims.
