Does Home Insurance Cover Water Damage?

The obvious answer to this question should be a simple yes, but it actually “depends.” The way your home insurance policy protects you from water damage is complicated and depends on the situation and source of the water.

Under the average home policy, if the damage caused by water is considered sudden, accidental, and comes from inside your home, this is normally covered. However, if the damage is the result of flooding from outside the home, then this is likely covered by a flood insurance policy. On the other hand, if the damage is the result of negligent maintenance or repair, there may be no coverage.

Let’s unpack this and uncomplicate how your home insurance covers water damage.

How do water damage claims work?

Water damage is one of the most common home insurance claims. If you notice water damage in the home, like with any other claim, you’ll need to immediately notify your insurance carrier. In fact, you should also begin to mitigate the damages to prevent things from getting worse.

Once the insurance carrier is notified they will dispatch an adjuster who will inspect the damage and determine whether you’re covered for water damage. Coverage for water damage usually depends on three key factors:

1. 1. Policy type or endorsement:

   When you purchase a home insurance policy, you must understand exactly what type of water damage is covered. For instance, if you have a sump pump for siphoning water from beneath your house, there may be little or no coverage without the proper endorsement. Therefore, if the pump breaks down, and your basement floods, you may not have coverage without the proper endorsement. Some insurance carriers make “water backup coverage” optional, or offer it with a small sub-limit that can be endorsed to increase the limit for a small premium.  Water backup coverage may not only provide coverage for your sump pump, but it would also protect you in the event of a clogged sewer.

2. 2. What is the source of the damage:

   Where the water comes from is particularly important when it comes to water damage claims. For instance, if the source of the damage comes from inside your home you’ll likely be covered by your homeowner’s insurance. Two good examples would be a burst water pipe under the kitchen sink, or a ruptured appliance water hose. Also, leaking roofs are generally covered by your homeowner’s insurance policy as well. However, if the water damage is coming from sources outside the house, like tidal surges, overflowing lakes, and rivers, this is typically handled by flood or windstorm insurance.

3. 3. Was the damage sudden and accidental vs. gradual:

   Your homeowner’s insurance isn’t designed for gradual, wear and tear damages. This is true for all types of claims, not just water damage claims. For example, if your dishwasher has been leaking for several months and you haven’t worked to replace the hoses or correct the problem, your homeowner’s insurance won’t cover the resulting damage or plumbing costs.

   Alternatively, if during the winter a frozen pipe bursts and floods your home, you’re generally covered. This type of accident is considered sudden and accidental, and not the product of wear and tear. However, as will all home maintenance items, you have responsibilities and should be maintaining your home regularly. There are preventative measures you can take to reduce your risk. If you don’t maintain your home well, this could impact coverage.

Covered vs. not covered water damage?

Disclaimer: This list is not meant to be a full and complete list of things that are covered, nor is it a warranty that items will be covered. The insurance carrier and adjuster are the final arbiters of coverage, this list is for illustration purposes only.

Why are these water-damaged items not covered?

• Water back-up from sewer or drain: Water damage from a sewer or drain is usually not in the standard coverages in your home insurance policy, or it’s limited, without an endorsement. You can add this coverage to the standard policy for a premium, but it doesn’t come automatically. Therefore, if you want protection from water backup, sewer, and sump-pump risks, make sure to request this coverage when you buy homeowners insurance.
• Flooding from outside the home: When water damage comes from flooding sourced from outside the home, it’s typically not covered on a standard homeowners insurance policy. This type of coverage is provided by a flood insurance policy. You can purchase flood insurance from the National Flood Insurance Program or private insurance carriers. If you live in an area considered high risk for floods or a body of water you should consider buying a flood policy.
• The source of the water damage: Let’s say your dishwasher malfunctions and overflows. Your home insurance will cover the water damage caused by the mishap, but it won’t cover the cost of repairing or replacing the dishwasher as home insurance isn’t intended to protect against wear and tear.
• Negligent maintenance and repair: Your water damage insurance claim may be denied if you simply fail to perform proper maintenance. If you ignore your responsibility to keep your home in normal working order, then damages are more likely to happen. For example, if a pipe freezes and bursts because you didn’t properly heat your home or your water heater explodes because it wasn’t maintained regularly, your claim may be denied.

What you should do if you experience water damage?

Record the damage: Take videos and photos of the affected area and damaged belongings. Don’t alter the scene or remove ruined items until an adjuster has completed their inspection.

Prevent more damage: Take steps such as removing excess water and moving undamaged valuables to avoid further harm.

Take a home inventory Make a detailed list of all damaged items, including their make, model, age, and cash value, whenever possible.