We welcome clean fresh water in our kitchens and bathrooms, but sometimes water arrives uninvited and causes damage. Will your homeowners insurance pay for damage from unwanted water in your home? Like many things in life, the answer is: It depends.
What insurance covers
In general, homeowners insurance covers water damage that is “sudden and accidental.”
For example, if a severe thunderstorm with high winds rips off a section of your roof allowing heavy rain to pour in, the resulting damage will generally be considered sudden and accidental and thus be covered. If a pipe bursts and water soaks your Sheetrock and flooring, the event qualifies as sudden and accidental and most likely your homeowners insurance will cover the resulting damages. It would not, however, pay for the repair of the burst pipe itself.
On the other hand, If water damage is the result of a slow dripping leak in a wall over time, that likely will not be covered, especially if the homeowner would have found the leak through routine maintenance.
Exceptions to sudden and accidental damage
There are a couple of exceptions to water damage coverage from a sudden and accidental situation.
Standard homeowners insurance does not cover damage from flooding of a nearby stream, lake or other body of water. Flood insurance is sold separately under the National Flood Insurance Program, available through certified agents.
Damage caused by water backing up into your house from an outside sewer or drain is not covered by homeowners insurance. Backup water damage riders are available, however, to supplement your main homeowner’s policy.
How much will insurance pay?
If a claim is covered, your insurance will pay for damages up to the maximum amount of your policy after your deductible is met. As an example, say you have covered damages of $12,000 and the insurance has a deductible of one percent of your home’s value and a coverage limit of $25,000 for water damage. If your home is worth $275,000, then your deductible — the amount of damage you must cover out of pocket — is $2,750. The insurance company will pay for the remaining $9,250 in repair costs. You must pay out of pocket for any damages beyond your policy limits.
Protecting yourself from water damage
Water damage is the second most common property damage claim nationally, behind only wind and hail damage. Read your policy and talk to your agent about its terms.
Since slow leaks can go undetected and insurance doesn’t typically cover the damage they cause, purchase water alarms. These are affordable and can possibly prevent extensive damage through early detection. Place them in key locations near water pipes and faucets: under the kitchen and bathroom sinks, on the floor by the washing machine close to the water supply lines, in the basement and on the floor beside the water heater.