The four home-insurance gaps that cost the most

Standard home policies are broad but they exclude some of the most likely and expensive losses. Four gaps account for most nasty surprises.

1. Overland flood

Water from overflowing rivers, lakes, or heavy runoff is excluded by default and sold as a separate endorsement. With climate-driven flooding rising, an address with any water exposure needs it.

2. Sewer backup

Water backing up through your drains is optional coverage, often capped low. The average flooded-basement claim runs around $43,000 (IBC), while a $10,000 cap is common — leaving most of the loss on you. The endorsement itself is cheap (roughly $30–$100/year). Raise the cap to match a finished basement.

3. Earthquake

Excluded by default. In seismically active areas — coastal BC and the St. Lawrence/Ottawa Valley region of Quebec — it's a separate endorsement worth pricing.

4. Rebuild cost vs market value

Insurance should cover what it costs to rebuild, which can differ sharply from market value. If your dwelling limit tracks your purchase price, you may be under-insured (or paying for land you can't lose). Ask for a rebuild-cost estimate and consider guaranteed replacement cost.

Bonus trap

Running a business or short-term rental (Airbnb) from home can void parts of a standard policy without an endorsement.