Are you buying a flood-prone home? It’s hard to find out

Anyone who owns a home knows its weaknesses when it rains. But those shopping for a place to live largely don’t have that information and may unwittingly move into flood-prone areas. Blair Feltmate, head of the Intact Centre on Climate Adaptation at the University of Waterloo in Ontario, warns that homebuyers need to be more aware of flood risks when making their purchasing decisions.

In the past decade, homes in flood-impacted areas of Canada have sold for an average of “minus 8.2 per cent” for at least six months after a flood event. Even homes that were not directly affected by flooding saw a decrease in value simply due to their location in a flood-prone neighborhood. This issue is not limited to Canada, as hundreds of thousands of Americans looking for affordable homes have unintentionally moved into flood-prone areas.

Flooding has resulted in over $3 billion in insurable losses in Ontario and Quebec this year alone. The Insurance Bureau of Canada estimates that 10 per cent of homes in the country are uninsurable for flooding, but the exact locations of these properties are not widely known.

Feltmate emphasizes the importance of being informed about extreme weather risks, especially flooding, before making a significant investment in a home. While publicly available flood maps in Canada are outdated, real estate agents and insurance brokers are becoming more knowledgeable about climate change and flood protection, providing better information to potential homebuyers.

The Appraisal Institute of Canada has acknowledged the need to incorporate climate risk considerations into property valuations. However, access to flood risk data is inconsistent across the country, making it challenging to assess the flood risks associated with a specific property.

Insurers rely on third-party companies to obtain flood risk data to determine which properties to insure and at what cost. Homeowners are encouraged to shop around for insurance coverage if they encounter difficulties finding a provider willing to insure their property due to flood risk.

In the U.S., real estate companies are required to disclose flooding risk at the point of sale, but this regulation does not exist in Canada. The federal government is working on a centralized national portal that will compile all flood maps across the country, providing homebuyers with instant access to flood risk information based on postal codes.

To protect a home that is highly vulnerable to flooding, homeowners can take proactive measures such as addressing grading issues, installing a battery backup for sump pumps, and maintaining backwater valves. These steps may make a flood-prone home more attractive to insurers, but there are no guarantees.

Ultimately, being informed about flood risks before purchasing a home is crucial to protect one’s investment and financial well-being. As climate change continues to impact weather patterns, understanding and addressing flood risks will become increasingly important for all homeowners.