As a homeowner, you know the importance of having homeowners insurance. Your house is likely one of the largest investments you'll make, and you want to protect it. Unfortunately, many homeowners fail to understand what their insurance actually covers, and what may need an additional policy or endorsement. When it comes to water damage, you may not know what is typically covered, and you do not want any surprises in your coverage when disaster strikes.
Our goal is to help you understand what a standard home insurance policy typically covers, and how you can ensure that your home is protected. A good rule of thumb is that homeowners insurance will likely cover damage that is sudden and accidental and will not cover damage due to normal wear and tear. In addition, most water that comes "down", such as rain, will be covered, while water that comes "up", such as a flood, will not.
Of course, not all home insurance policies are created equal, so it is important for you to read and understand what your policy includes when it comes to water damage. Thankfully, some common incidents that are not covered by standard homeowners insurance can be covered by supplemental policies that may be available to you.
Homeowners have a choice when it comes to their home insurance policies. There are 8 different policy forms available, which all have different qualifications and coverages. Perils, or events that occur that may result in requiring coverage from your insurance, are often specifically listed in your policy. Different forms of homeowners insurance policies may include or exclude specific perils from their coverage. Understanding the risks of your dwelling and understanding the coverage of each form is important in deciding which policy is right for you. Keep in mind that this is a general list, and that some states and companies may have differing coverage for each form.
HO-1: An HO-1 policy is the most simple and bare homeowners insurance policy. While the building itself is covered under this type of policy, none of the belongings inside would be. Only the 10 explicitly listed perils named below are covered under this form. This type of policy is rarely available, but availability may depend on your state.
HO-2: Coverage under the HO-2 form includes everything from HO-1, plus the other 6 perils named below. Like HO-1, only the specific perils listed in your HO-2 policy are covered, plus personal belongings.
HO-3: HO-3 policies are the most common form of homeowners insurance. These policies are attractive to homeowners due to their wide coverage and as they cover all perils, with the exception of some specific exclusions, plus personal belongings. However, some causes of water damage, which will be discussed in this article, are still not covered.
HO-4: This policy form is specifically for renters. The all listed perils covered by HO-2 and HO-3 are covered by this form, and personal belongings are often covered as well. However, both the owner of the structure and the tenants need to have HO-4 insurance policies in order to obtain all of the coverage provided by this form.
HO-5: This type of policy, like the HO-3, covers any perils that are not specifically named as an exclusion. It offers more coverage for personal belongings than HO-3 policies, but not without a price tag. This is the policy form that offers the most depth to homeowners.
HO-6: This form covers condominium living. It includes the same broad coverage as HO-3 and other policies, as well as personal property and other associated costs.
HO-7: HO-7 forms are specifically for mobile home living and generally offer the same coverage as the HO-3 form, meaning that all perils except those specifically listed will be covered by your policy.
HO-8: HO-8 policies were created specifically for older homes and only cover the 10 named perils. Due to the age of the homes covered, the payout for this policy is quite low.
Fire or lightning
Windstorm or hail
Riot or civil commotion
Weight of precipitation
Accidental discharge or overflow of water
Sudden and accidental damage to a built-in appliance
Sudden and accidental damage from an artificially generated electrical current
Most commonly named in HO-3 policy forms, these are some of the specific exclusions usually listed, some of which will be further discussed in this article:
Ordinance or law
Earthquakes, Landslides, etc.
Government seizures and actions
As the homeowner, you are responsible for maintenance on your pipes. Issues due to normal wear and tear of pipes, for example those in an older home that have not been updated, are not typically covered by a standard home insurance policy. If water damage results from a leak that you failed to have fixed, your policy will likely not cover it. In fact, across the United States, 10 trillion gallons of water are leaked annually. In contrast, if a pipe suddenly bursts resulting in damage to your home, it would usually be covered. Routine maintenance of pipes and tubes leading to appliances is important in order to prevent leaking pipes that may cause a gap in insurance coverage.
Freezing temperatures can cause pipes to burst in your home. As long as you are not neglectful by intentionally letting the temperature inside your home reach the point of freezing, typical policies will cover the resulting damage. However, leaving faucets dripping during times of extremely cold weather or shutting off and draining your faucets can prevent you from needing to cash in on your homeowners insurance policy.
Regardless of the cause of flooding, be it due to excessive rainfall, rising bodies of water, or natural disasters such as hurricanes, standard home insurance policies do not cover flooding or the damage to your home resulting from flood waters. However, there are options available to you. Policies specifically for flood insurance can be available to you in order to offset costs incurred by flood damage.
Backups from outdoor sewer and drains are not covered under typical homeowners insurance. Sewage backups can be caused by blockages of tree roots, sanitary mains, or basement flooding. Thankfully, coverage for damage resulting from sewage backups may be available through an additional policy.
In the event of water being used to combat a fire in your home, your policy will cover water damage, whether it is from a sprinkler system or a hose used by the fire department.
Despite the "normal wear and tear" general rule, most roof leaks are covered by your insurance policy. Events that could cause damage to your roof resulting in water damage may include wind storms, natural disasters, fire, or fallen trees. These events would qualify for the resulting water damages to be covered. However, leaks may not be covered if there is neglect to properly maintain the roof, among some other exclusions.
Water damage resulting from Earth movement, such as an earthquake or landslide, is not covered by standard homeowners insurance policies. In order to obtain coverage for these types of natural disasters, you will have to have a supplemental policy. Depending on your geographic location, the risk of such events could warrant the need for additional coverage in order to protect your home.
Without the help of homeowners insurance, water damage is extremely costly. In fact, the average claim for water damage in the United States is around $10,000. Water damage is a common insurance claim, ranking as the second most common. Water damage can affect the foundation, walls, flooring, ceiling, and the overall integrity of your home. Unresolved, water damage can lead to more problems from mold and rotting. While your homeowners policy will cover things like a busted pipe from your refrigerator or washing machine, it will not cover the costs to repair or replace the appliance. If the water causes damage to your floors, for example, your policy will cover the cost of repairing the floors, but you will be responsible for the cost of repairing the source of the damage. Most commonly, water damage occurs from roofs, toilets, sprinklers, water heaters, and HVAC systems.
When you suspect the need to claim water damage on your homeowners policy, following certain guidelines could help to make the process go smoothly. It is important for you to control the damage, preventing the spread of the water as much as possible. Keep any records you have of home maintenance. Take photos and makes lists to provide evidence of the damage done. Report damage to your insurance company as soon as possible. All of these things will help to ensure that you are taken care of to the extent that your policy will allow.
It is important to understand the specifics of your homeowners insurance policy. Coverages can be different according to state guidelines and company policies, which can make it overwhelming for homeowners to understand. Water damage is a commonality, and it is something that unfortunately many homeowners are not prepared for when it is necessary. Being aware of standard coverages, assessing risks, and opting for supplemental policies when needed can make a dramatic difference in the overall cost to you in the event of water damage occurring in your home. Providing routine maintenance and taking precautions can help to avoid the need for your homeowners insurance to cover water damage, but the benefits of being covered in the event of a disaster make it necessary to have adequate coverage for your home.