Floods are a serious problem in much of the U.S., particularly in the Southern states where hurricanes and storms make landfall every year. The average flood insurance claim is $43,000. Without insurance, homeowners need to pay for this out-of-pocket. Does homeowner insurance cover water damage?
Unfortunately, flood insurance is not covered by homeowners’ insurance. Homeowners must take out a separate flood insurance policy. However, certain types of water damage may be covered by homeowners’ insurance. It is important to be aware of the types of damage a conventional homeowners’ insurance will cover to avoid being hit by an unexpected repair bill.
What Is Homeowners’ Insurance?
Homeowners’ insurance is designed to protect a homeowner’s property and possessions, as well as offer liability cover. Most types of damage are covered by homeowners’ insurance, with some notable exceptions. The two big exceptions being earthquake and flood insurance.
This type of insurance is essential, and many mortgage providers will demand a comprehensive homeowners’ insurance policy before they authorize the loan. This is required because homeowners’ insurance also protects the lender if a property is decimated by a tornado, house fire or other natural disaster.
Coverage Within Homeowners’ Insurance That May Apply To You
Homeowners’ insurance has multiple types of coverage within it. Depending on the policy, water damage at home from a ruptured water boiler or broken pipe, for example, may be covered by it.
Naturally, it depends on the type of water damage and how the water damage occurred in the first place. This is where there is a considerable amount of confusion among homeowners. Many property owners who believe they are protected are, in fact, vulnerable.
There are two major types of coverage that are used to protect homeowners against water damage.
Dwelling coverage is designed to pay for any water damage caused to the structure of the property. This only applies if the damage occurred as a result of a covered peril.
For example, a valid covered peril would be if a pipe bursts and the water damages the drywall. Dwelling coverage would cover the repairs to the wall, floor and any damage to the foundations.
Personal Property Coverage
Personal property coverage is the part of a homeowners’ insurance policy that covers any damage to the possessions of a home. This would apply to any electrical gadgets or furniture. If a leaking water heater drips onto a set of computer cables and causes the computer to catch fire, personal property coverage would cover the cost of the computer.
One caveat is that the source of the water damage is not covered under homeowners’ insurance. If the whole floor needs to be replaced, the policy will cover it, but the burst pipe that caused it will need to be repaired out-of-pocket. This aspect of homeowners’ insurance will typically have a deductible before the coverage kicks in. There may also be coverage limits that restrict how much an insurer will pay to replace any personal property. Homeowners should speak to their insurance agent to find out more about their deductibles and the coverage limits that apply to them.
What Types Of Water Damage Are Not Covered By Homeowners’ Insurance?
There are certain types of water damage not covered by homeowners’ insurance. A burst pipe or a faulty water heater may be covered, but no insurer will cover water damage caused by improper maintenance. Insurers will only pay if that burst pipe was sudden and unexpected. If an existing problem was neglected, homeowners’ insurance will not provide restitution.
Also, homeowners’ insurance does not apply to water damage caused by a backed up outdoor sewer or drain. To cover this type of damage, sewer and water backup coverage must be purchased as an additional add-on.
Flood Is Not Covered In Homeowners’ Insurance
The biggest mistake property owners make is assuming they are covered in the event of a flood. No homeowners’ insurance policy has flood insurance coverage. A separate flood insurance coverage will need to be purchased, with the appropriate dollar limits and deductibles.
This only applies to floods caused by natural disasters. A flood caused by a faulty pipe would still likely be covered under an existing homeowners’ insurance policy. Flood insurance is a critical addition to a home protection package because every state in the country has experienced severe floods at some point in their history.
Get Help From The Insurance Experts With Homeowner Insurance Cover Water Damage
Homeowners’ insurance is one of the most common forms of insurance in the country. Despite this, it remains a highly complex insurance type, with numerous caveats and exceptions to the rules. You should familiarize yourself with your policy and go through what’s covered and what’s not covered with a professional insurance agent. For expert advice on the various coverage options available, speak to an insurance agent from Merchant Family Agency.