Water damage is one of the most common reasons people make claims on their home insurance, but unfortunately, not all water damage is covered by the basic homeowner’s policy.
"Water damage and homeowners policies can be a volatile issue in many ways," says Don Griffin, vice president of personal lines at the Property Casualty Insurers Association of America, a trade group. "Generally, the damage caused by water will be covered, but whatever causes the damage — say a leaking dishwasher hose — may not be."
Homeowners insurance policies are generally very specific about what damage is and is not covered when it comes to water problems. For example, the insurance company may pay to replace a carpet damaged by your dishwasher leak, but you probably have to replace or repair the hose at your own cost. If a sudden, unforeseen problem such as a frozen pipe leads to water damage, your home insurance covers repairs to both the broken pipe and your home and furnishings.
When it comes to expansive water damage caused by flooding, a homeowner’s insurance policy is less reliable. Flood damage to your home can only be insured with a flood insurance policy. Flood insurance is available through your local insurance agency or local Federal Emergency Management (FEMA) office. To determine if your home is located in a flood plain, contact your county planning office. If you are living in a flood plain, flood insurance may be an excellent purchase.
The difference between water damage and flood damage is slim, but significant. A "flood" is defined as a rising and overflowing of a body of water onto normally dry land. Therefore, flood damage is caused by water that has been on the ground at some point before damaging your home. For example:
- A backed up sewer that floods your basement
- Floods caused by a nearby lake or river.
- A heavy rain causes water to seep into your floor.
- A flash flood causes the hill behind your house cause a mud slide in your basement.
Without flood insurance, the damage to your home is left up to you. While homeowners insurance will cover your possessions (furniture, clothes, etc.), it is important to maintain flood insurance if you live in a flood plain area. Generally, your insurance company will discuss the flood insurance options with you when you purchase your homeowners policy, but it’s a good idea to double check your coverage, especially during the spring and summer months.
If you’re not sure what your policy covers when it comes to water damage, it is up to you to ask your insurance agent or insurance company to explain what exactly is covered by your policy. And find out if you need the additional coverage of a flood insurance policy. If you truly want to get the right amount of insurance coverage to protect your home and its contents you must first fully understand what is covered by your policies.