Water Damage Claims – What You Need to Know

More often than not, your homeowners’ insurance will not cover water damage claim from floods, sewage backup, or gradual leaks, but it will cover damage from a burst pipe. These homeowners’ insurance policies protect your home and personal property against devastating weather, theft, and other types of perils. For most other perils, your coverage is going to be easier to understand and will not require much reading in between the lines, but when it comes to water damage to your home, this becomes a different story.

Water damage often is never covered when it is a result of floods and sewer overflow; it is usually covered when it is deemed by your insurer as sudden and internal. Therefore, a burst pipe, wind-driven rain or malicious activity that may be because a person who burglarized your home was using a Super Soaker, these are usually covered in your policy. However, if the water damage is a result of negligence or gradual deterioration, then these will not be covered even if this originated inside the house. The residual mold that forms it will not be covered either.

In a standard homeowner’s insurance policy, this will usually cover water damage to the home or personal property that is within the home if the cause can be determined as coming from a sudden cause and it came from inside the house. There are also certain weather-related dangers that will cause water damage which is also included in the standard insurance policy.

Unless your insurance policy is an open-peril or all-risk policy, chances are, your home insurance coverage will only going to cover protection to your properties which have been damaged by the perils specifically mentioned.  The dwelling provision in these policies usually covers the structure of your home on an open-peril basis, but it is also common for even the broad policies to limit the personal property provision to named perils.  

Fortunately, the following water damage perils will usually be named in the personal property section of your policy:

• Damages from rain or snow

Rain, snow and ice dams that form on your roof are usually covered on the policy which is usually referred to as windstorm and weight of snow perils. Water damage which resulted from wind-driven rain or snow and collapsed roof from ice dams may be covered by the insurance policy if it can be determined that the damage has been caused by a covered weather event or condition.

However, if it will be determined that the water that entered into your home is because of corrosion or rotting to your roof or siding, chances are, your insurance policy will not cover it.  

• Damages from plumbing

This type of damage will usually fall under accidental discharge or overflow of water or steam in your insurance policy. If the water damage is from a sudden burst or blockage in your plumbing system may also be covered in your insurance policy. This will also include a fire sprinkler system, air conditioners, outdoor sprinklers, water heater, and other circulatory piping throughout your home.

The water discharges from your appliance such as your washing machine or dishwasher are also covered in the policy. But, the repair or replacement of the appliance itself may be excluded. Therefore, it is recommended that you avail of a home warranty.

• Damage from fire extinguishment

If there is a fire in your home and the fire sprinklers are activated or that firefighters are forced to extinguish the fire, any resulting water damage from this occurrence will also be covered in your insurance policy.

• Damages from vandalism

Now, if a person enters into your home and then intentionally destroys your plumbing or he or she leaves the water running, this will be included in your policy and is tagged under “malicious activity” peril in your insurance policy.

It should be noted by now that when the damage is not caused by sudden reasons and the damage is a result of gradual damage, there is a high chance that this is not going to be covered in your home insurance. If the water landed on the ground and then flowed to your home, this will also not going to be covered in your home insurance.

Therefore, it is recommended that you add a rider or endorsement, if such is possible, so to cover certain types of water damage including residual damage like mold or rot. You may talk with your insurer about what add-ons or riders are available for your policy, or you may choose to speak with a licensed representative who can help you walk through the different coverage that is being offered by your insurance company.  

The following are some common exclusion in homeowners’ insurance policies:

• Damages caused by floods

Regardless of how the water originated, floods, generally, are excluded from every basic homeowners’ insurance policy. These include, but are not limited to – rainwater, surging rivers, and drenched ground.

In order for you to be able to get flood-damaged covered, you will need to purchase a separate flood policy.

• Damages from sewage water

When water overflows from sewage, or it drains and finds its way into your home, this type of damage is not going to be covered in your standard insurance policy. However, most of the insurance companies are offering water backup riders or endorsements to be able to supplement this gap in the insurance coverage.

• Damages from poorly maintained plumbing

This type of damage is considered as neglect on the homeowner’s part and is not going to be covered by the insurance policy. This happens when water leaks from poorly constructed old piping and appliances thereby causing water damage and mold.

Even with an insurance policy at hand, prevention is still much important than cure. It is still better to make sure that your home is safe from preventable and foreseeable perils so that you will not go through the hassles of the insurance claim process. But, there will always be inevitable events, and when such happens, just make sure that you have the right people to help you with the reasonably speedy processing of your claims.