“Come Hell or high water.” That’s what you’d like your homeowners’ insurance policy to say. Sadly, the truth when it comes to water damage is far more complex.
FEMA research says that only a minority of homeowners in flood-prone areas actually have flood coverage – just 42%!
Are you covered for water damage? Below, we’ve pulled together everything you’ll need to know when it comes to water damage on your property…
Types of Water Damage
Insurance is an intricate industry, so you’d better believe that water damage comes in flavors! Water damage can be largely categorized into three groups:
Overflow & Discharge
Overflow and discharge are the most internal issue you might face. Examples include:
- A faulty appliance
- Burst pipes
- Leaking faucet
Overflow and discharge incidents can largely be split into two kinds: sudden and progressive.
Your homeowners’ insurance will likely cover a sudden overflow/discharge problem.
However, a progressive issue is likely to result from neglect, flawed maintenance, or leaving a problem unchecked. These problems are likely to fall outside of your homeowners’ insurance.
Sewer backup results when municipal systems fail due to problems such as age, wear and tear, and natural causes.
Sewer water is commonly dirty and unsanitary, often enough to cause a health hazard.
Sewerage problems usually aren’t covered by default in your homeowners’ insurance policy, though it can usually be added to your policy at reasonable rates.
As our cities grow and our sewers age, the rate of sewage backup incidents is actually increasing year by year, so now may be a good time to check if you’re covered.
Here’s where you’ll find a vocabulary gap between you and your insurer.
You may be tempted to tell them your home is flooded after a plumbing or sewerage issue, but flooding is narrowly defined by insurers, so be prepared for some discussion on the subject to establish the origin of the water and which part of your insurance coverage it pertains to – if any!
We look at what exactly defines flooding and what you can do about flood insurance below.
What is Flooding?
From an insurance perspective, flooding specifically relates to the inundation of your property arising from external factors.
The National Flood Insurance Program defines a flood as a temporary condition where two or more acres of normally dry land or two or more properties are inundated by water or mudflow.
As a rule of thumb, a water damage related issue which affects only your home would not be viewed as flooding and is therefore often not covered by standard homeowners insurance.
If water is overflowing onto land which is normally dry, then you may be looking at a flood situation. Examples include a burst river bank, levee breach, or storm surge.
When Do I Need Flood Insurance?
So we’ve established that floods are a specific case when it comes to water damage and now you’ll need to know when flood insurance is required.
Sadly, this isn’t cut and dry. It depends greatly on your situation.
Flood insurance might even be mandatory for you. This tends to be the case where you have a federally-backed mortgage in a high-risk area.
In most other cases, the decision on whether to take out flood protection is up to you.
If you live in an area covered by the National Flood Insurance Program, you may find you can take out a private policy backed federally. Outside of those areas, you will need to purchase privately.
FEMA maintains a resource for finding out if your community is a flood risk area.
What Does Flood Insurance Cover?
If you’ve decided you don’t want to be one of the 42% mentioned earlier, you may want to know what, exactly, your flood insurance covers.
You can insure your home for an amount not exceeding $250,000, and the contents to an amount not exceeding $100,000.
What flood insurance doesn’t cover is any damage above that amount, most of your basement, and any furnished aspect of the property located below ground level.
There’s a major exception in flood coverage you need to be aware of; earth movement.
Essentially, if the damage to the home is caused by earth movement, even should the earth movement be water related, it’s unlikely to be covered by your insurance. This includes earthquakes, sinkholes, and general erosion.
What Can I Do If I’m Not Protected?
If the vagaries of flood insurance have left you up the creek, you still have options.
Firstly, you can apply for federal disaster assistance, from which you may be able to receive a grant to fix you up with temporary shelter and other emergency requirements.
You may even find you’re not completely outside of your insurance. In the event of a storm or similar climatic event, leaks are a likely contributor to water damage in your home, and these may be covered by your insurance.
What Other Steps Can I Take?
This may read like a big list of exceptions and caveats, but there are things you can do as a homeowner to reduce any headaches arising from a water damage incident.
- Check your coverage: carefully checking your policy can be the difference between receiving a payout and leaving you out of pocket, so read the small print!
- Keep your home maintained: you may find yourself unable to make a claim if you haven’t taken steps to mitigate the possibility of water damage.
- Make detailed records/inventory of your property: photographic or video evidence of the state of your property along with a full inventory can avoid disputes about pre-existing issues or lost items.
- Make detailed records of any damage: wherever possible, create records of damage caused by an incident.
Establishing Your Coverage
Now may be a good time to speak to your insurer. Armed with the information above, you can contact them to discuss your coverage, likely issues (are you in a flood-prone area?), and any exceptions.
Although we’ve equipped you with as much information as we can, it’s still important to get advice which relates to your particular circumstances. As you’ve seen, coverage for water damage can be a slippery subject.
If you’ve found this post useful, have any questions, or would like to leave some advice for fellow homeowners, feel free to leave a comment below!
You can also contact us for further advice or to schedule a service call.