No, standard homeowners insurance typically doesn’t cover flooding. While it might seem counterintuitive, home insurance primarily protects against unexpected events like fire, theft, or vandalism, not natural disasters like floods.
This distinction is crucial, as both homeowners and insurers rely on clear definitions to determine coverage. So, let’s break down the specifics of water damage coverage in homeowners insurance and understand how it differs from flood coverage.
Understanding Water Damage Coverage in Homeowners Insurance
Water damage is one of the most common and costly perils that homeowners face. According to the Insurance Information Institute, water damage and freezing accounted for 23.8% of all homeowners insurance claims in 2019, with an average claim amount of $10,849.
Homeowners’ insurance typically covers water damage that is sudden and accidental, such as a burst pipe, a leaky roof, or an overflowing toilet. However, the extent of coverage depends on the type and amount of coverage you have in your policy. Two main types of coverage can help you pay for water damage repairs: dwelling coverage and personal property coverage.
Dwelling Coverage
Dwelling coverage is part of your homeowner’s insurance that covers the structure of your home and any attached structures, such as a garage or a deck. If water damage affects your home’s walls, floors, ceilings, or electrical systems, dwelling coverage can help you pay for the repair or replacement costs, up to your policy limit. However, dwelling coverage only covers water damage that is caused by a covered peril, which is a specific cause of loss that is listed in your policy. Some common covered perils that can cause water damage are:
- Fire or lightning
- Windstorm or hail
- Explosion
- Riot or civil commotion
- Aircraft or vehicles
- Smoke
- Vandalism or malicious mischief
- Theft
- Falling objects
- Weight of ice, snow, or sleet
- Accidental water or steam overflow
- Sudden and inadvertent tearing apart, cracking, scorching, or bulging of a steam or hot water heating system, air conditioning, automatic fire sprinkler system, or water heater.
- Home appliance or plumbing, heating, air conditioning, or automatic fire-protective sprinkler system freezing
- Unexpected damage from artificially generated electricity
- Volcanic eruption
These are the perils that are covered by a standard HO-3 policy, which is the most common type of homeowners insurance. However, some policies may have more or less perils covered, so you should always check your policy documents or contact your insurance company to confirm what is covered and what is not.
Personal Property Coverage
Personal property coverage is part of your homeowner’s insurance that covers your personal belongings, such as furniture, clothing, electronics, and appliances. If water damage affects your personal property, personal property coverage can help you pay for the repair or replacement costs, up to your policy limit. However, personal property coverage also only covers water damage that is caused by a covered peril, which may be different from the perils covered by dwelling coverage. For example, some policies may cover water damage to your personal property caused by accidental discharge or overflow of water or steam, but not by freezing of a plumbing system. Again, you should always check your policy documents or contact your insurance company to confirm what is covered and what is not.
Types of Water Damage Not Covered
There are some types of water damage that are not covered by homeowners insurance, regardless of the type and amount of coverage you have. These include:
- Water damage is caused by a flood, which is defined as an excess of water on land that is normally dry, affecting two or more acres of land or two or more properties. Examples of floods are flash floods, storm surges, mudflows, or overflow of inland or tidal waters.
- Water damage is caused by a sewer backup, which is when water or sewage from outside the home backs up into the home through pipes or drains. This can happen due to heavy rain, clogged sewer lines, or damaged sewer systems.
- Water damage that is caused by gradual or repeated leakage, seepage, or overflow of water or steam. This can happen due to faulty plumbing, worn-out appliances, or improper maintenance.
- Water damage that is caused by neglect, wear and tear, deterioration, or corrosion. This can happen due to lack of upkeep, aging, or exposure to weather or environmental conditions.
If you want to protect your home and belongings from these types of water damage, you will need to purchase a separate flood insurance policy or a sewer backup endorsement or take preventive measures to avoid or minimize the damage.
Similarities and Differences Between Water Damage and Flood Damage
Water damage and flood damage are both types of damage that are caused by water, but they are not the same thing. Water damage is a broader term that encompasses any damage that is caused by water, whether it comes from inside or outside the home. Flood damage is a specific type of water damage that is caused by a flood, which is an excess of water on land that is normally dry, affecting two or more acres of land or two or more properties. Flood damage is not covered by homeowners insurance, but water damage may be covered, depending on the cause and the type of coverage you have.
What is Considered a Flood?
The Federal Emergency Management Agency (FEMA) defines a flood as “a general and temporary condition of partial or complete inundation of two or more acres of normally dry land area or of two or more properties.” This definition emphasizes the overflowing nature of floodwaters, exceeding normal water levels and submerging land not typically covered by water.
Does Homeowners Insurance Cover Flood Damage?
No, homeowners insurance does not cover flood damage. Flood damage is excluded from homeowners insurance because it is considered to be a catastrophic and widespread risk that is difficult and expensive to insure. If homeowners insurance covers flood damage, the premiums would be too high for most homeowners to afford. Therefore, the federal government created the National Flood Insurance Program (NFIP) in 1968 to provide affordable flood insurance to homeowners, renters, and business owners in participating communities. The NFIP is administered by the Federal Emergency Management Agency (FEMA), and the policies are sold and serviced by private insurance companies.
When to Consider Flood Insurance?
Flood insurance is not mandatory for all homeowners, but it may be required by your mortgage lender if you live in a high-risk flood zone, which is an area that has a 1% or greater chance of flooding in any given year. These areas are designated by FEMA as Special Flood Hazard Areas (SFHAs), and are shown on Flood Insurance Rate Maps (FIRMs). You can use the FEMA Flood Map Service Center to find out if your property is located in an SFHA. However, even if you live in a low- or moderate-risk flood zone, which is an area that has less than a 1% chance of flooding in any given year, you may still want to consider flood insurance. According to FEMA, more than 20% of flood claims come from properties outside of high-risk flood zones, and just one inch of water in your home can cause up to $25,000 in damage. Flood insurance can provide you with peace of mind and financial protection in case of a flood, regardless of where you live.
Preventing Water Damage in Your Home
While you cannot prevent all types of water damage, especially those caused by natural disasters, you can take some steps to reduce the risk and severity of water damage in your home. Here are some tips on how to prevent water damage in your home:
Regular Maintenance
- Inspect your roof, gutters, and downspouts regularly for any cracks, leaks, or clogs, and repair or replace them as needed. Make sure your gutters and downspouts are clear of debris and direct water away from your foundation.
- Check your plumbing, appliances, and water heaters for any signs of corrosion, wear and tear, or leaks, and fix or replace them as needed. Install water leak detectors and automatic shut-off valves to alert you and stop the water flow in case of a leak.
- Clean and maintain your sump pump, if you have one, and test it periodically to ensure it is working properly. Consider installing a battery backup or a generator to keep your sump pump running in case of a power outage.
- Seal any cracks or gaps in your foundation, walls, windows, and doors, and apply waterproofing or caulking to any areas that may be prone to water seepage or infiltration, such as basements, bathrooms, kitchens, or laundry rooms.
- Insulate your pipes, especially those that are exposed to cold temperatures, to prevent them from freezing and bursting. Keep your faucets dripping slightly during extremely cold weather to prevent pressure buildup in the pipes.
- Monitor your water bill and water meter for any unusual spikes or changes, which may indicate a hidden leak somewhere in your home.
Proper Home Renovations
- If you are planning to renovate or remodel your home, make sure you hire a licensed and reputable contractor who can follow the building codes and standards in your area. Avoid any DIY projects that may compromise the structural integrity or water resistance of your home.
- If you are adding or changing any plumbing, electrical, or heating systems, make sure they are installed properly and safely, and that they comply with the manufacturer’s instructions and warranty requirements. Use high-quality materials and fixtures that can withstand water pressure and temperature fluctuations.
- If you are finishing or converting your basement, make sure you waterproof the walls and floors, install a vapor barrier and a drainage system, and use mold-resistant materials and paints. Avoid using carpet, wood, or other porous materials that can absorb water and promote mold growth.
Backup Systems
- In case of a power outage, which can affect your sump pump, your heating system, or your water supply, consider installing a backup system that can keep your home functioning and prevent water damage. This can be a battery backup, a generator, or a solar panel, depending on your needs and preferences.
- In case of a water supply interruption, which can affect your faucets, toilets, or showers, consider installing a backup system that can provide you with an alternative source of water. This can be a water tank, a rain barrel, or a well, depending on your location and availability.
How to File a Water Damage Claim?
If you experience water damage in your home, you should file a claim with your homeowners insurance company as soon as possible, to get the compensation you deserve and to start the recovery process. Here are some steps to take when filing a water damage claim:
Steps to Take
- Contact your insurance company or agent and report the water damage. Provide them with your policy number, the date and time of the incident, the cause and extent of the damage, and any emergency measures you have taken to prevent further damage. Ask them about your coverage, your deductible, your claim process, and your responsibilities.
- Document the water damage. Take photos or videos of the damaged areas and items, and make a detailed inventory of everything that was affected, including the description, value, and receipts of your belongings. Keep copies of all the documents and evidence for your records and for your insurance company.
- Prevent further damage. As much as you can, try to stop the water source, dry out the affected areas and items, and remove any debris or contaminated materials. However, do not make any permanent repairs or dispose of any damaged items until your insurance company inspects them and approves your claim. Keep receipts of any expenses you incur for emergency repairs or temporary living arrangements.
- Cooperate with your insurance company. Follow their instructions and provide them with any information or documentation they request. Allow them to inspect the water damage and estimate the repair or replacement costs. Review their settlement offer and negotiate if you disagree with their valuation or coverage.
Necessary Documentation
The documentation you need to provide to your insurance company when filing a water damage claim may vary depending on your policy and your situation, but generally, you will need to provide the following:
- A written notice of the water damage, including the date, time, cause, and extent of the damage, and any emergency measures you have taken.
- A proof of loss, which is a sworn statement that details the amount and value of your claim and that you sign and submit to your insurance company within a specified time frame.
- A photo or video evidence of the water damage, showing the damaged areas and items, and the water source or cause.
- An inventory of the damaged items, including the description, value, and receipts of your belongings, and indicating whether they are repairable or replaceable.
- A receipt of the expenses you incur for emergency repairs or temporary living arrangements, if applicable.
Working with Your Insurance Company
Working with your insurance company can be a stressful and frustrating process, especially if you have a large or complex water damage claim. However, you can make it easier and smoother by following these tips:
- Be honest and accurate: Do not exaggerate, omit, or falsify any information or documentation related to your water damage claim, as this can delay or deny your claim, or even result in legal action against you. Be truthful and consistent in your communication with your insurance company, and report any changes or updates to your situation as soon as possible.
- Be proactive and organized: Do not wait for your insurance company to contact you or follow up with you. Instead, initiate the contact and keep track of your claim status and progress. Keep a record of all the communication and correspondence you have with your insurance company, including the names, dates, times, and details of your conversations. Keep all the documents and evidence related to your water damage claim in a safe and accessible place, and make copies or backups of them.
- Be patient and cooperative: Do not expect your water damage claim to be resolved quickly or easily. Depending on the severity and complexity of your water damage, it may take weeks or months for your insurance company to process and settle your claim. Be prepared to answer their questions, provide them with additional information or documentation, and allow them to inspect the water damage and estimate the repair or replacement costs. Be respectful and courteous in your communication with your insurance company, and try to resolve any disputes or disagreements amicably and professionally.
