‘It’s been devastating’: Flood prompts fears of bankruptcy for Ottawa woman

Kathryn Peterkin and her friend Mike survey damage in her basement nearly three weeks after it flooded on Canada Day during a record-breaking rainstorm. July 21, 2026. (Austin Lee/CTV News Ottawa)

When the Canada Day storm hit Ottawa’s Bells Corners neighbourhood, Kathryn Peterkin seized the opportunity to make the most of the one-in-200-year storm, launching her kayak on Oberon Street, where floodwater turned the road into a river.

But that fun on the water was short-lived.

Nearly three weeks later, Peterkin is afraid of spending time inside her house because of potential mould. She’s living in her garage and fears she may be forced to declare bankruptcy in a matter of months.

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“It’s been devastating. Absolutely devastating. I’m living in fear every day,” said Peterkin.

Hers was one of thousands of basements in Ottawa that flooded on Canada Day.

Wastewater came rushing through the pipes in her laundry room and bathroom, sending filthy water and feces into her basement.

Three weeks later, she says she still has not received an estimate from Economical Insurance, a company she says she’s been with for more than 20 years.

To make matters worse, just months before the flood, Peterkin says she took out loans amounting to more than $135,000 to renovate her home with the goal of sprucing the place up before listing it for sale.

“I was a few weeks away from selling it and then the flood happened. I refinished my basement completely, redid the bathroom, redid the flooring, the ceilings,” said Peterkin. “Now my house has been gutted.”

In November, before the renovations, she says her realtor told her she could likely sell the house for around $400,000.

In March, after the renos, she says the realtor said to expect closer to $600,000.

“I had sort of planned it out so that by the time I was finished using the loan money, I would be able to list the house and then re-pay all the loans right away,” she said.

“We’ve been working day and night for over six months. I’ve had so many contractors come in.”

Peterkin says prior to the flood, she had never filed a claim.

Now that she needs support from her insurance provider, she says she’s been left in the dark, with no official estimate, and no indication when she can expect insurance money.

“I don’t have money to cover my financing, so I have about two to three months left before I have to file for bankruptcy,” said Peterkin.

“[The insurance company] told me to stop spam texting them.”

In a statement to CTV News Ottawa, a spokesperson for Definity Financial Corporation, the parent company of Economical Insurance, said they have been in regular contact with Peterkin.

“We continue to be actively engaged throughout her claim, maintaining regular contact, completing an inspection, and approving key replacement work, including the furnace and hot water tank. We remain committed to working closely with her to complete the remaining repairs as quickly as possible,” reads the statement.

“Ms. Peterkin’s claim was reported on July 3. Initial contact was made on July 4, an inspection was arranged on July 7 and completed on July 8, and we have remained engaged throughout the claims process.”

However, Peterkin says communication is lacking, and she still has no indication when her claim will be finalized.

Her message to Economical Insurance: “Call me back! Just give me an estimate so that I can start getting the work done!”

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She says she did not hear from anyone with Economical Insurance for about a week until CTV News Ottawa contacted the company.

A day later, Peterkin says someone from Economical Insurance reached out to inform her that they were assigning a new person to handle her file, but there was still no concrete timeline or decisive information on the status of her claim.

Peterkin says she’s not alone.

Others on her street are also struggling to find a resolution with their insurance company.

Director of consumer and industry relations for the Insurance Bureau of Canada, Anne Marie Thomas, says these types of insurance claims general take about one month to six weeks.

However, given the widespread impact of the July 1 storm, insurance companies are backed up.

“On the scale that we saw on July 1, where there were somewhere in the neighbourhood of 6,000 people affected, these things can take longer,” said Thomas.

“Each insurance company only has so many adjusters, each adjuster only has so many restoration firms that they can use, and then once all the reports start coming in, that can take time to work through, too.”

If you need assistance while dealing with an insurance claim, the Insurance Bureau of Canada has launched a helpline for flood-stricken Ottawa residents.

Peterkin’s home likely would not be eligible for the province’s Disaster Recovery Assistance for Ontarians (DRAO) program because it was damaged by sewer backup and not overland flooding.

Either way, her community of Bells Corners is not covered by the DRAO activation for Ottawa.

“I don’t get it. There’s no logic. No logic at all,” said Peterkin’s friend Mike Cross.

“Be there for the people. We pay our taxes. We deserve rights too, not just certain areas.”

There continue to be calls from other Ottawa neighbourhoods to expand the DRAO program.

In a statement to CTV News Ottawa, a spokesperson for the Ministry of Municipal Affairs and Housing said “The activation area for the Disaster Recovery Assistance for Ontarians (DRAO) program was established using information provided by the City of Ottawa. We will continue working closely with the city and impacted residents.”