Homeowners Insurance and Water Damage
Insurance companies hate water damage. It's expensive, isn't easy to repair, and happens often. The average water damage claim is $9,633, and it was the second most common claim reported. About 1 in every 50 homes file water damage claims each year.
5 Main Types of Water Damage
Insurance providers are very strict about how they classify and cover different types of water damage. Many times water damage is preventable with proper home maintenance, so carriers carve out what kind of water damage is not covered. The most common types of water damage are:
- Flooding - not covered in your standard homeowners policy, but can be purchased as a separate policy from NFIP or Private Flood Companies.
- Water Damage from a Burst Pipe - usually covered in your standard homeowners policy. You are not covered if they are leaking slowly over time.
- Water Backup Coverage - not covered in your default home insurance policy, but can be added. (do not confuse with Water Overflow)
- Storm-Related Water Damage - if the water enters from above ground level, this is usually covered by your standard homeowners policy.
- Water Seepage/Groundwater - not covered in your standard homeowners policy.
Now that you know the 5 most common water damage claims let's dive deeper into each one.
1. Flood Damage
FEMA defines a flood as:
1. A general and temporary condition of partial or complete inundation of 2 or more acres of normally dry land area OR of 2 or more properties (at least 1 of which is the policyholder's property) from one or more of the following:
- Overflow of inland or tidal waters
- Unusual and rapid accumulation or runoff of surface waters from any source
2. Collapse or subsidence of land along the shore of a lake or similar body of water as a result of erosion or undermining caused by waves or currents of water exceeding anticipated cyclical levels that result in a flood as defined above.
Does homeowners insurance cover flooding?
No. You'll need to purchase additional coverage with a separate flood insurance policy.
2. Water Damage from Broken Pipes
Water damage from pipes can be either sudden or gradual. Unforeseen and sudden damage is covered; gradual deterioration over time is not. An example of gradual damage would be a leaky pipe from under the sink, eventually damaging the basement below over a matter of weeks. A case of sudden loss would be a pipe bursting and causing damage in the home at 5 PM on a Friday.
Does homeowners insurance cover damage from leaky and broken pipes?
Yes, usually. In most cases, your policy would cover sudden damage. However, if you fail to take reasonable measures to protect your home (keeping it warm in winter to prevent pipes bursting), then you may not be covered. Gradual damage from a slow leak would not be covered because it gets classified as failed maintenance by the homeowner.
3. Water Backup Damage/Sewer Sump Pump Backup
Damage from sewer and sump pump backups is gross and often expensive to repair. That's because when water backup damage happens, the water is typically either gray or black water. Black and grey water can carry bacteria, viruses, parasites, chemicals, and other contaminants that further damage a home.
Expensive sanitation has to happen even before repairs begin.
- Sump Pump Backup - Sump pump either shuts off or becomes clogged. Heavy rains back up and enter the house either on the ground floor or basement.
- Sewer Backup - Water lines from your sink or toilet are clogged and force water back up into the home.
Does homeowners insurance cover water backup damage?
Not by default. You'll need to purchase an additional add-on for coverage.
4. Storm-Related Water Damage
Water forced into your home through the roof, walls, windows, etc. constitutes storm-related water damage. Water can also enter your roof through ice melt. Storm-related water damage flows from the outside, top, down, into your home.
Does homeowners insurance cover storm-related water damage?
Yes. Storm-damage is a named peril in your homeowners policy, and any damage from it should be covered. Keep in mind that you must take reasonable measures to prevent further damage once you find the source of water. Take pictures!
5. Groundwater/Seepage Damage
Groundwater damage typically classifies water that enters your home at or below ground level. Groundwater can originate from sewage backups and sump pump failures, but another common way is via seepage through the foundations of older homes.
Does homeowners insurance cover groundwater/seepage damage?
No, usually. Many homeowners insurance policies exclude groundwater damage, believing homeowners need to prepare their homes to prevent this type of damage. If groundwater damage is gradual, it can result in denied claims. Installing a sump pump is one way to avoid damage from groundwater in most homes. In some states, like Texas, you can buy foundation & water coverage as an add-on to cover water leaking in from a compromised foundation.
Now you know how insurance companies look at water damage in your home!
At your service,