Is Water Damage Covered By Home Insurance?

Does Homeowners Insurance Cover Water Damage?

Usually, standard homeowner insurance policies cover sudden and accidental water damage. Any water damage claim that is caused due to negligence of homeowners or failure to maintain and repair the house can be rejected.

Homeowner’s insurance covers sudden and accidental incidents causing water damage.

Rains and snowstorms

Burst pipes, frozen pipes, accidental overflows, faulty plumbing

Water damage that occurs when a fire is extinguished

Leaks from the roofs that occur suddenly (for instance, after a storm, or when branches fall on the roof)

Accidental leaks from faulty appliances like a broken dishwasher or malfunctioning washing machine. The insurance would usually cover only the water damage restoration costs and not the cost of repairing the appliances

Vandalism

Ice dams due to ice build-up in gutters, provided this happened suddenly and not because of poor maintenance

Water damage that is not covered by normal homeowner’s insurance includes incidents caused by the following.

• Negligence by homeowners and lack of maintenance result in water damage that homeowner’s insurance will not cover. For example, not turning the heat on in winter results in frozen pipes bursting, which causes water damage that will not be covered by the insurance.
• Water damage caused by floods, tsunamis, hurricanes, etc is not covered by standard homeowner’s insurance policies. A separate flood insurance policy to cover flood damage can be purchased through the National Flood Insurance Program and some private insurance companies.
• Earth movement during landslides, earthquakes, or mudslides can cause earth movement that results in water damage. This water damage will not be covered by homeowner’s insurance, but an earthquake insurance policy will cover such claims. 
• Leaking and seepage through the foundation
• Intentional acts that cause water damage
• Gradual leaks and seepage that cause water damage including mold damage
• Backup from a sewer or drain is not typically covered by standard home insurance. Homeowners can purchase coverage, especially for this.
• Replacement or repair cost of faulty appliances that caused water damage cannot be claimed in a standard home insurance policy
• Sump pump failure causing water damage needs separate coverage as it is not included in home insurance

Homeowners must ensure that the insurance company is informed as soon as possible after an incident causing water damage. It is best to document with pictures or videos the damage. Temporary fixes to contain the damage, like using a tarp to stop water from coming in through a roof leak can be done after documenting the damage. Not taking steps to minimize water damage or delaying action can adversely affect an insurance claim.

Mold

Mold is common, especially after water damage, and can be expensive to get rid of. But it may not always be covered by home insurance. It may be covered if it is the result of sudden catastrophic situations like burst pipes or an AC system overflow. If the mold is considered as an extension of the covered water damage, the home insurance may cover all or some of the mold removal costs. Homeowners can choose to purchase a floater or endorsement that provides extra coverage for mold to their home insurance policy.