Insurance policy surrounding water damage issues can be very confusing and frustrating. To start with, policies vary with the source of water damage, what has been damaged, and with your insurance carrier. It is important that you discuss with your agent what exactly your policy covers and if there are any adjustments that can be made with your policy. What sources of water damage exactly are covered by insurance policies?
Flood: Insurance policies do not cover flood. If you are in a flood prone area, you can instead buy flood insurance from the National Flood Insurance Program, a government agency.
Water backup: Most insurance policies do not cover water damage caused by water overflowing from sub-surface ground level. To prevent groundwater from seeping into your house, make sure there are no cracks in your outer walls, your downspout pointed away from your house structure, and your sump pump working well.
Bathtub overflow: Water damage caused by overflowing of bathtub is covered by insurance. It doesn’t even matter if you left the faucet running.
Burst pipes and failed appliances: Some insurance policies cover water damage caused by certain plumbing problems such as toilet overflows, as well as damage caused by failed appliance such as burst water heater. However, insurance policy typically does not cover replacement of broken appliance; if it still covered by warranty, the manufacturer will have to replace the appliance.
Storm: Most policies cover damages caused by storm in the house interior and the materials inside your home. There are conditions that apply, however. For one, the building itself should have been damaged, and the damage inside your home is a result of damage to your house. For instance, if the storm blew a roof in the kitchen, causing rain to enter your house and damage your refrigerator and an expensive painting, the refrigerator and the painting will be covered. However, if rain entered your kitchen through a window you left open, the water damage may not be covered.
Seepage: Insurance policies typically cover only sudden and accidental losses caused by seepage. However, if water damage is caused by repeated seepage over a long period of time, most insurance policies usually rule it out as negligence or poor maintenance on the part of the homeowner. The latter type of damage is, then, not covered.
Another factor that determines how much you get for damage repair from your insurance is building code. Building codes are changed every few years. Insurance policies pay only for the amount of damages; they don’t cover upgrades. For instance, if your 20-year roof was damaged during a storm but new building codes require a 30-year roof, then you have to put up the money to cover the difference. Your insurance carrier will only reimburse the cost of your old roof.
Before signing an insurance policy, make sure that your agent has explained to you the rules and the limitations of the insurance with regards to water damage. Find out if certain adjustments can be made to ensure that you get as much benefit as possible. It would be better if you shop for insurance to find the most attractive offer. Your home is one of your most valuable assets, so you should find the best way to have it protected.
