Solved! Does Homeowners Insurance Cover Water Damage? – Bob Vila
Q: I recently had a pipe burst in my home, causing all kinds of damage to the drywall, ceiling, and floor. I’m trying to determine how to go about getting it repaired. In general, does homeowners insurance cover water damage? Or will I need to pay out of pocket for the repairs?
A: The answer to the question “Does homeowners insurance cover water damage?” (or “Does renters insurance cover water damage?” if you rent) is yes, but only if the damage was sudden and accidental. The cause of your burst pipe will be important for the homeowners insurance company to determine whether repairs are covered by your policy. For instance, if the burst pipe resulted from cold weather and you took precautions to prevent it from happening, that will likely be covered by your homeowners insurance policy. However, if you went on vacation in the middle of winter and turned off the heat in your home, then returned to a burst pipe and water damage caused by your negligence, your claim is likely to be denied. Learn more about when homeowners insurance tends to cover water damage and when it does not.
Homeowners insurance policies typically cover water damage if it is sudden and accidental.
The key term when determining the answer to the question “Does homeowners insurance cover water damage?” is “sudden and accidental.” If the event that caused the damage happened in a way that a homeowner could not predict or prevent, it’s considered sudden and accidental and is likely to be covered by homeowners insurance. While learning how to make a successful water leak insurance claim, it’s important to know what counts as sudden and accidental.
The events that a standard homeowners insurance policy typically covers are referred to as “perils.” These include sudden and accidental perils, like fire or lightning and even falling objects. As covered perils relate to water damage, policies from the best homeowners insurance companies often cover accidental discharge or overflow of water or steam from a plumbing, air conditioning, heating, or fire-protection sprinkler system. If these water systems in the home suddenly or accidentally break apart, crack, burn, or bulge, these perils are also usually covered. Sometimes a freezing plumbing system that goes on to cause damage (like a burst pipe) might be covered if it is deemed sudden and accidental, and not the result of some type of negligence, like not properly insulating pipes.
There are two types of coverage that can help pay for water damage repairs: dwelling coverage and personal property coverage.
Does insurance cover water damage? If you sustain water damage that is deemed sudden and accidental, there are two types of coverage on your policy that could help cover what was damaged. It’s important to know which types cover loss if you’re wondering how to get insurance to pay for water damage.
The first type is dwelling coverage, which protects the structure of the home itself. For instance, if a pipe burst suddenly and floods the basement, dwelling coverage would help cover damage to the structure of the house, like replacing drywall or carpeting if the basement was finished. Similarly, if a plumbing fixture bursts in the bathroom and requires the homeowner to redo the bathroom, dwelling coverage would handle repairs to any structural fixes in the bathroom, like the flooring.
The second type of homeowners insurance that could cover water damage is personal property coverage, which covers possessions that were damaged by the covered peril. If that same pipe burst in a finished basement, personal property coverage would cover the cost of items like TVs, computers, furniture, or items in storage that sustained water damage. How much does insurance pay for water damage? Homeowners insurance usually offers either actual cash value or replacement cost coverage for possessions. Actual cash value will pay out the depreciated value of the item, while replacement cost covers the cost to replace the item at today’s prices. As such, replacement cost coverage is usually the best choice if you’re concerned with how to maximize a water damage claim in the event one occurs.
Before either type of homeowners insurance coverage pays out for water damage, the homeowner will likely need to pay a certain amount out of pocket, called a deductible. Deductibles are standard with most types of insurance, including homeowners insurance. Once the homeowner has paid the deductible amount determined by their policy, the rest of the cost for repairing or replacing damaged items will generally be covered by dwelling or personal property coverage. Depending on the extent of the damage and the deductible amount, the homeowner may decide to pay for the repair or replacement costs themselves rather than filing a claim.
Homeowners insurance typically covers water damage caused by a roof leak, burst pipes, storms, ice dams, and extinguishing a fire.
Is water damage covered by insurance? Sometimes, but one of the key water damage insurance claim tips is to be aware of the circumstances for which coverage will likely apply. Above were some of the main categories of what is covered by homeowners insurance. However, there are other specific perils related to sudden and accidental water damage that homeowners insurance may be likely to cover.
For instance, roof leaks are usually covered by homeowners insurance if they are caused by a covered peril. Does homeowners insurance cover water damage from rain? Possibly; for instance, if that roof leak happened because of damage from a windstorm, it will most likely be covered because windstorms are usually covered perils listed in standard homeowners insurance policies. Burst pipes are some of the most common covered water damage incidents because a burst pipe can be a sudden and accidental event, even with proper maintenance. If a drastic storm causes other water damage, such as a fallen tree branch that takes out a window and causes rainwater to soak the interior of the home, that is also likely to be covered. Ice dams also tend to be covered, as homeowners insurance covers damage from extreme winter weather, like weight of ice, snow, or sleet on the home. Finally, extinguishing a fire might count as covered water damage if the fire needed to be put out with a hose or other water source that then also drenched the home and personal possessions.
However, homeowners insurance will not cover water damage caused by neglect or lack of maintenance, water backup from a drain or sewer, ground seepage, or a flood.
While homeowners insurance can and does cover many different events, there are also several common events that homeowners insurance won’t cover. As stated, for the event to be covered by insurance it typically has to be deemed sudden and accidental. That means anything that happens due to neglect or lack of maintenance by the homeowner will typically not be covered. So if that pipe burst because it was clearly rusting through and no effort was made to fix it, then water damage from that burst pipe would likely not be covered by the homeowners insurance policy. Homeowners might also be found negligent in cases where a pipe freezes but the outside water lines were not turned off in winter or no effort was made to insulate vulnerable pipes. Old and corroded plumbing fixtures that burst are also not likely to be covered.
Other common incidents that are not covered are often related to flooding issues. As far as water damage goes, standard homeowners insurance policies tend to cover any sort of top-down water damage, such as damage from a roof leak in a storm or a burst overhead pipe. That means drain or sewer backups, ground seepage, or flooding water damage is not often covered. These are considered bottom-up water incidents.
Another point to remember is that homeowners insurance typically does not cover mold. Mold tends to grow from a long-neglected presence of moisture in a space, which means that it is considered preventable with proper maintenance by the homeowner.
Purchasing additional insurance policies, such as flood insurance and water backup coverage, can add extra protection against water damage.
Homeowners who are concerned about bottom-up water damage do have some water insurance coverage options. They can purchase additional homeowners insurance through add-ons, which are sometimes called riders or endorsements. One example of this is water or sewer backup coverage. This protects homeowners in the event that water damage happens from water backup in sewage, which causes water to enter the home through drains.
Flood insurance is offered as a separate policy. This covers many flooding events that happen from natural disasters like heavy rains. Flood insurance is usually required by mortgage companies if a home is in a high-risk flood zone. However, even areas that are not deemed to be high risk could experience flooding conditions if severe weather hits, making flood insurance a good consideration for most homeowners. It’s easy to purchase, but it does often come with a 30-day waiting period before coverage takes effect to prevent people from purchasing it only when there are flood conditions. Read more about the best flood insurance companies to determine which is the best choice for you.
Homeowners insurance usually won’t repair or replace the source of the water damage, so a home warranty can help cover these costs.
Another point to keep in mind is that homeowners insurance only covers what has been damaged by the water, such as the structure itself or personal possessions. That leaves homeowners with the responsibility of replacing whatever caused the water damage. For instance, if a water heater broke suddenly and accidentally, then the homeowner would have to replace that water heater or pay the bill to get it repaired. So the answer to the question “Does homeowners insurance cover pipe replacement?” is likely no. A water damage insurance claim only covers the dwelling and personal possessions, not the item that caused the damage.
Many homeowners don’t like that feeling of being unprotected for major expenses, so that’s where purchasing a home warranty can give added coverage. Home warranties are service agreements that can repair or replace certain systems or components that fail in the home. Contracts from the best home warranty companies vary, so homeowners might consider shopping around to make sure the home warranty covers what they want to be covered. Some home warranties might require additional coverage purchases to cover the major systems that cause water damage, like water heaters or plumbing fixtures.