What You Need To Know About Water Damage and Homeowners Insurance

Water damage can be devastating, costly, and destructive to your home. The causes of water damage range from weather-related flooding to overflowing toilets. The statistics related to water damage are daunting. According to the Insurance Information Institute, over 20% of homeowners insurance losses are due to water damage and freezing, a close second to hail and wind damage.

Do you know what types of water damage your homeowners policy covers? For most destructive events, like fires, your coverage is fairly straightforward and easy to understand. But water damage is different, as some types of water damage are covered and others are not. The general rule of thumb is if it comes from the top down (like rain), it’s covered, but if it comes from the bottom up (like an overflowing sewer), it’s not.

Since water damage can originate from many sources, water that has overflowed or flooded a home is classified into three categories:

• Category 1 — clean water: Uncontaminated water that poses no threat if people are exposed (for example, water from a sink overflowing)

• Category 2 — grey water: Water that may contain contaminants with the potential to cause illness if people are exposed (for example, sump pumps or discharge from dishwashers)

• Category 3 — black water: Contaminated water that will cause serious illness if people are exposed (for example, sewage spills, standing water or floodwater)

Essentially, your insurance company will cover sudden and accidental water damage. For example, if a pipe bursts, your washing machine hose breaks or your water heater ruptures, damage to your home and property will be covered.

Depending on the type of water damage, two different coverages in your homeowners policy may apply. These are dwelling coverage and personal property coverage.

Dwelling covers the cost to repair a structure in your home if it’s damaged by water. If your wall is damaged from a burst pipe, dwelling coverage will pay to repair the wall.

Personal property covers damaged belongings. If your bookcase is damaged by a burst pipe, your insurance will pay to repair or replace it.

Every insurance policy has coverage limits—the maximum amount you will be reimbursed for a claim. Look over your policy so there are no surprises, and review your deductible so you know how much you will need to pay out of pocket if you submit a claim. If you’ve made any recent changes or upgrades to your home or personal property (for example, home renovations, a new deck, or expensive new furniture), make sure to let Van Wyk Risk Solutions know so that we can ensure your coverage limits are up-to-date!

There are a few situations when water damage is not covered. Some examples are:

• Water damage caused by an overflowing sewer

• Water damage due to flooding

• Water damage from a leaky pipe that hasn’t been maintained

You can purchase separate water backup coverage, which may help with damage from an overflowing sewer or drain. If you’re in a flood zone, you can also purchase a separate flood insurance policy. Even if you’re outside a flood zone, it may be a good idea to consider flood insurance due to heavy rains and ground saturation.

Maintaining your home can help you avoid some types of water damage. Inside your home, inspect dishwashers and washing machines for cracks or leaks and replace them at the end of their life cycles. Check for leaky faucets, as well as caulking around showers and tubs. When you leave for vacation, turn off the main water shut-off valve. If you live in colder climates, allowing your faucet to drip and insulating your pipes may help prevent them from freezing. Outside your home, inspect your roof and check downspouts. Remove any debris and make sure downspouts are positioned in a way that they drain water away from your house.

Related Links:

• What’s Included in a Homeowners Policy?
• Tips to Lower Your Home Insurance Premium?
• Life Events That Affect Your Insurance Needs