Insurance Does NOT Cover All Water Damage

6/30/2021 (Permalink)

Most people assume that their homeowners insurance policy will automatically cover any water damage that they suffer in their home. After all, isn’t that what it’s for?

Unfortunately, the reality is that not all water damage is the same in the eyes of your insurance carrier. While many water intrusions are covered in full, there are plenty of examples of situations where coverage was insufficient or inapplicable to a major water disaster.

What does homeowners insurance cover?

Most policies cover water damage for which the cause is “sudden and accidental.” These situations often include burst pipes, water heater failures and other incidents that are potentially catastrophic and difficult to predict.

Your policy also likely includes separate coverage for your dwelling and your personal property. Your dwelling coverage includes the structure of your home, while your personal property coverage includes your belongings.

What doesn’t homeowners insurance cover?

Even on covered losses, most policies require the homeowner to pay a deductible out of pocket. They also usually include coverage limits – the insurance carrier is only required to pay out an amount up to the coverage limit to fulfill their end of the policy.

Generally, losses that aren’t “sudden and accidental” are not covered. If it’s determined that the damage was ongoing and could have been prevented with maintenance (e.g. a slowly leaking plumbing fixture), the damage will likely not be covered.

Dealing with the source of the water damage also likely isn’t covered. If your pipe bursts, you’ll probably pay for that out of pocket, while your policy will cover the damage from the water itself.

Water backups, like from a sump pump, often require a special type of coverage called “water back up coverage” to be paid out by an insurance carrier. Floods also aren’t covered by standard homeowners policies. If you think that there’s a chance that you’ll suffer a sump pump backup or a flood, you should call your insurance agent ASAP to inquire about how to insure yourself against this sort of damage.

Keep in mind that this blog post is just a guideline – every insurance situation is different. If you have any questions or concerns, we suggest that you call your agent before a loss happens to make sure that you’re protected. If you wait until after to start asking questions, then it’s already too late.