Insurance companies recognize that a large number of homeowners’ insurance claims result from various types of water damage. As a result, they have broken water damage down to a few different types.
Each insurer then decides which type of water damage coverage they want to insure you against and exactly how much coverage they will afford you (and of course, how much to charge you for each).
Here’s the breakdown:
1. Sudden and accidental discharge of water (above the foundation) – this coverage is typically included on a homeowners insurance policy. It is not mandatory, so you should certainly verify coverage exists on your policy.
2. Water seepage and leakage coverage – discussed in this post.
3. Foundation water damage – follow link.
4. Water back up from sewer or drain – this one should be pretty self-explanatory. However, it is not automatically covered on every homeowner’s insurance policy. Again, better to check to know for sure.
5. Escape of water from a sump or sump pump – again, not automatically included. If you have a sump or sump pump you should call your agent or insurer to verify coverage.
Let’s take a quick look at an example of the actual policy language surrounding continuous and repeated leakage coverage and then break it down into an explanation we can all understand:
“We cover the deterioration, wet or dry rot of property described in Coverage A, B and C caused by accidental, repeated or continuous seepage or leakage of water or steam from within a plumbing, heating, air conditioning system or from within a household appliance.”
Basically, this coverage is designed to protect you against losses from long term leaks, i.e. water damage that did not occur “suddenly and accidentally,” which would be a pipe busting on your water heater.
This is the coverage for that water leak you “didn’t know about until the ceiling collapsed.” Many insurers either don’t offer this coverage or only offer it by endorsement for an additional charge.
The thinking on the insurer’s part is; this sort of damage is caused by lack of home maintenance rather than a “true” insurable event, which is your “sudden and accidental” water damage. You would be hard-pressed to obtain this coverage for a dwelling policy for that exact reason.
Contact a local independent insurance agent if you’re in the market for a new homeowner’s insurance policy or if you’re unable to obtain the premium or coverage you need with your current carrier.
Note: Flood coverage is not available on any homeowners’ policy from any insurer in the U.S. Flood insurance is available only through the National Flood Insurance Program (NFIP).