How Does a Homeowners Insurance Policy Cover Water Damage?

According to a recent study done by the Insurance Information Institute, when it comes to homeowners insurance claims in the U.S., weather-related and non-weather related water damage takes up the first and second positions, respectively. The study found that between 2014 and 2018, 2.3% and 2.1% of insured households filed a claim for weather-related and non-weather related water damage, respectively. Additionally, in 2017 alone, insurers spent $13 billion on water damage coverage, with the average payout amounting to about $10,000. Meanwhile, the American Insurance Association (AIA) says that claims over $500,000 have doubled since 2015. With about one in every 50 insured households filing a claim every year, chances are you, too, will likely need water damage coverage eventually. Read on to find out whether or not your homeowners insurance policy offers water damage coverage.

Water Damage Homeowners Insurance Cover – Scope of Coverage

In most cases, a standard home insurance policy will cover non-weather related water damage to your home and your personal property within your home. But to avail the benefits of the cover, your insurer will seek to establish that the cause was sudden and, more importantly, came from inside your house.

In addition to non-weather related water damage, a standard homeowner insurance policy may also cover certain weather-related water damage risks provided such risks are specifically listed on your insurance policy. Unless you have either an all-risk policy or an open-peril policy, your home insurance policy will only cover your property damaged by named/insured risks. More specifically, standard HO3 policies cover 16 risks, whereas broad HO3 policies tend to limit the personal property provision to insured perils.

Water Damage Coverage – Common Named Risks

Most homeowner insurance policies include the following items as named risks:

  • Weather-related Events and Conditions –

Your standard homeowners insurance policy probably covers water damage associated with weather events or conditions such as a windstorm or wind-driven rain.

  • Plumbing –

If you see phrases such as overflow of water or steam or accidental discharge on your homeowners’ insurance policy, it merely means your policy covers water damage associated with your home’s plumbing system. This would cover water damage caused by blockages or sudden bursts in your home’s plumbing system. It is worth noting that your home’s plumbing system consists of the entire circulatory piping throughout your home, which covers everything from your fire sprinkler systems to your outdoor sprinklers to your HVAC systems. Under plumbing, your homeowners’ coverage may also cover water discharge from appliances such as dishwashers and washing machines. However, it will likely exclude the appliances themselves. To protect your appliances, you need a home warranty policy.

  • Fire-suppression Activates –

If a fire breaks out in your home, fire-suppression systems and activities may cause your home to suffer water damage. For instance, when firefighters arrive, they will likely flood your home, leading to water damage. Additionally, in the event of a fire, fire sprinklers release enough water to cause water damage, including mold problems. Fortunately, most homeowners’ insurance policies cover water damage caused by fire-suppression activities.

  • Vandalism –

Most homeowners’ policies cover water damage caused by malicious activities such as vandalism. For instance, if someone maliciously leaves the taps in your house running or damages your plumbing system leading to water damage, the “malicious activity” risk in your homeowners’ insurance policy would cover that.

Your homeowners’ insurance policy likely covers the risks named above. For assistance with all your insurance needs, contact the experts at Mike Leonard Insurance Agency in Texas. We can connect you with our top insurance carriers, including Kemper, MetLife, Nationwide, Travelers, Safeco Insurance, Progressive, and American Strategic Insurance, to find the coverage you need.