How Your Home Insurance May Cover You for Water Damage

Four-year-olds, they do the darndest things, such as stuffing tissue down the sink in the guest bathroom (true story). And, if it’s not something happening inside your home, it’s something happening outside, such as water pooling in your yard, coming right up to your back door, because your neighbor doesn’t have a proper drainage system (also true).

These are just two instances that can lead to water damage in your home. Then there’s flooding, sewer backup, burst pipes and more. So, when does your home insurance cover water damage? And, when doesn’t it? It all depends on your specific policy and the optional coverages you add to it.

Take the four-year-old playing in the bathroom. The sink overflowed, causing extensive damage to the walls and floors – $8,000 in all. Was it covered? Yes, but only because the family elected to add Backup of Water and Sewer when they purchased their home insurance policy. As such, the carrier reimbursed them for the repairs they made. Whew, crisis averted.

And, what about the flooded back yard?  Not covered.  The claim was denied because it was considered flooding of surface water, which is excluded from the typical homeowners policy.

In fact, home insurance typically has coverage exclusions for many types of water-related incidents, including floods, tidal waves, tsunamis and more.  In addition, backup of water from sewer or drains, overflow or discharge from a sump pump and water below the surface of the ground is not covered on a standard policy.

I know you're probably thinking, "What coverage do I have?"  A typical homeowners policy may include coverage for water damage resulting from leaking, burst or broken pipes.  The actual pipe or line that leaked, burst or broke isn't covered.  The water damage that ensues is.  Furthermore, if your home was built in the past 10 years and you discover faulty work, you may be able to get restitution from the builder (contractor/plumber) if he/she was licensed and bonded.

So, what about other types of water damage? You may want to consider some optional coverages or a supplementary policy to help. Backup of Water and Sewer / Overflow of Sump Pump is an optional coverage you can purchase along with your policy or add to an existing policy. This often provides anywhere from $5,000 to $50,000 of coverage or more, depending on what’s available from your carrier and what you select. The coverage typically applies to pipes and drains on the property and/or inside the house, including in the walls.

Flood insurance (available as a separate policy) adds yet another layer of protection. It’s highly recommended for those in flood-prone areas. But, a flood policy may be suitable even if you aren't in such an area, as it covers surface water runoff as well.  (Under this type of policy, the water damage resulting from the flooded back yard would likely have been covered).

If you're not sure whether or not you have coverage for these and other incidents, contact your independent insurance agent.  Ask to review your existing coverage and go over additional coverage options that are available to you.

After all, there have been some surprising and not-so-surprising natural disasters in the past 10 years (not to mention incidents involving toddlers and neighbors) that have led to widespread water damage in homes. It wouldn’t hurt to get some reassurance.