In many areas, water damage is among the leading causes of homeowners insurance claims. According to data assembled by the Insurance Information Institute, each year, about 1 in 50 insured homes has a homeowners insurance claim due to water damage or freezing. Whether homeowners insurance covers water damage depends on the source of the water and how the damage occurred; not all water damage claims are the same.
Types of water damage covered by homeowners insurance
How the water damage occurred and how your policy is written can make the difference that determines if your claim is a covered claim, a partially-covered claim, or even a denied claim.
Sudden and accidental water damage
If the source of the water is both sudden and accidental and isn’t the result of neglected maintenance, in most cases, your claim will be covered by your insurer, subject to the terms of your policy.
Sudden and accidental causes of water damage might include:
- A burst pipe
- A broken or failed water hose
- Tub or sink overflow
- Failed dishwasher connection
- Failed washing machine connection
- Sudden roof or window damage
Insurers are looking at the cause of damage to determine if coverage exists on your policy. Water damage that occurs suddenly and accidentally and that isn’t specifically excluded is usually covered by most policies.
Types of coverage for water damage claims
Your homeowners insurance provides several types of coverage, two of which are the primary coverages that may apply if you have a claim for water damage. A third type of coverage may also apply if you aren’t able to stay in your home temporarily due to a covered claim.
Dwelling coverage for water damage
Your dwelling coverage applies to your home itself, meaning the building structure and any attached fixtures. If your home is damaged in a covered water damage claim, your homeowners insurance policy may pay to repair your home and cover the expense of water damage remediation, which is often essential to prevent mold and further damage.
Personal Property coverage for water damage
Several types of water damage can affect your personal property, including furniture, appliances, and other household items. Your homeowners insurance policy can also provide some protection for your belongings if damaged or destroyed in a covered claim.
Loss of Use coverage
In many cases, if you are temporarily displaced from your home while your home is being repaired, your homeowners insurance can provide coverage for some of the additional expenses you might incur due to eating out or if you have to stay at a hotel temporarily. This coverage is usually called, “Loss of Use”. Be sure to review your coverage limits with your agent.
Deductibles for water damage claims
For water damage to your home or property, the deductible you’ve chosen will apply. You can think of the deductible as the part of the claim that you pay and which helps keep your policy more affordable. This may mean that some smaller claims, while eligible for insurance coverage, won’t be paid because the loss is below your chosen deductible amount. For larger covered claims, the deductible is “deducted” from the amount your insurer will pay toward a covered water damage claim.
A standard homeowners policy also excludes coverage for certain types of water damage, the most notable of which is floods. Some types of damage can be covered with an endorsement or by purchasing a specialized policy.
Water damage due to floods
Most homeowners insurance policies do not provide coverage due to floods. The easiest way to understand how an insurer defines a “flood” is to ask yourself if the water touched the ground outside before entering your home. While the puddle in your living room, basement, or kitchen may look the same regardless of the water source, a “flood” due to a burst pipe may be covered while a “flood” due to a storm or poor drainage may not be covered.
A separate flood insurance policy can provide coverage for storm flooding to help protect your home and belongings.
Water damage due to wear or neglect
Earlier, we discussed the importance of the term “sudden and accidental”. Most water damage claims that are due to normal wear or neglect will not be covered homeowners insurance. Your home insurance policy is designed to protect you against many types of unexpected losses but doesn’t function as a home maintenance policy. Common household mishaps like dripping pipes, leaky toilets, and leaky roofs, siding, or windows should be addressed promptly by the homeowner to avoid additional water damage or mold.
Sewer or sump pump backup
Most homeowners insurance policies specifically exclude coverage for water damage due to drain, sewer, or sump pump backup. Fortunately, this coverage can often be added to the policy as an endorsement. Be sure to discuss your coverage with your agent.
What else isn’t covered?
The source of the water, meaning the item needing repair, usually isn’t covered by homeowners insurance. If your washing machine failed and caused a minor flood in your home, your policy won’t provide coverage to repair the washing machine but your home itself is probably covered once you’ve met your deductible.
Roofs are a common culprit in water damage claims as well. Water damage from a roof that’s been leaking for a while isn’t covered in most cases but if a tree fell on your roof during a storm, the resulting water damage is covered by most policies. However, the cost of repairing or replacing your roof may be only partly covered. Many homeowners insurance providers treat roofs as a “wear item”, not unlike the tires or brakes on your car; they aren’t made to last forever. In the case of roof damage related to a water damage claim, your roof may be covered on a pro-rata basis depending on the age of your roof.
Discuss your water damage coverage with your agent
Many of the types of water damage that aren’t covered by a standard homeowners insurance policy can be remedied with an endorsement, which is simply an add-on to your policy, or by purchasing specific coverage for a given risk, like flood insurance.
Deductibles can play a big role in determining water damage coverage as well and the way personal property coverage is structured on your policy can affect the amount you’ll be reimbursed for damaged belongings in a water damage claim.
Most insurers recommend that you meet with your agent at least once a year to discuss your coverage and to be sure your insurance policies are structured to provide you with the protection you need.