Water Damage Types: What’s Covered?

I think of all the claims we see, water is the worst!!! I personally have experienced a burst water pipe, sewers backing up, and water coming in through my garage. The drain in front of the garage door had debris and the pipe collapsed due to a construction vehicle’s weight. We didn’t realize it until major rain storms. During Christmas of 2022, our office experienced several frozen and broken pipes. It was so not fun. Water claims can be devastating and can cause major disruption to your everyday life. 

About one in 50 insured homes has a property damage claim caused by water damage or freezing each year. Did you know that it’s five times more likely your home will be damaged by water than you’ll have a claim for theft? Water damage is seven times more prevalent than fire. 

So where is all this water coming from? 65% were caused by a failure of plumbing supply system material, while 18% were caused by frozen pipes. Drain system failures and sewer backups are other top sources of claims.

Insurance companies are now giving credits if you install an automatic water shut off system. It also can prevent you from ever having to deal with a water damage situation. I highly recommend them! Automatic water shutoffs are a computer that pays attention to how you use water and if it senses water change, it will shut the system, stop the flow of water, and prevent damage throughout your home and send an alert to you. 

Understanding What’s Covered

It is important to know that homeowners insurance will generally not cover claims for “seepage” or damage that occurs gradually over a long period of time. Think a slow water drip from the pipes inside your walls. If the reason for your damage is not sudden and accidental, then your water damage claim may be denied. 

Home insurance does not cover negligence, nor damage from floodwaters. Many types of water damage to real property can and should be avoided through proper maintenance. Burst pipes, plumbing failures, and toilet problems are the leading eligible water damage hazards. Below I go over common water damage sources and what is typically covered.

Insurance policies contain a variety of water terms, and it’s critical to understand these to understand what situations will be covered, or not. The source of the water matters. Unless noted otherwise, most of these sources of water damage are typically covered in a home policy.

Surface water runoff: This is typically not covered. It is like flood water, but not a flood event where multiple homes are impacted.

Water that comes in from outside the house – due to poor design or maintenance: This would be my example of the drain in front of my garage door clogging up due to lack of maintenance.

Flood (true flood event): This typically requires a separate flood policy. There has to be damage to your home and a home next door or 1 acre that shows water damage. 

Sump Pump Failure: When a sump pump fails and water backs up into your home. FYI always have a battery back up and a water sensor near just in case it stops working. The sensor will alert you to the water coming in and help you mitigate the damage.

Water/sewer backup: Comes up your sewer, sink or toilet.

Burst pipe/accidental faucet overflow: Pipe that burst, usually due to freezing.

Leaking pipes: Some policies will cover this. This is water that has slowly leaked from a pipe under or around areas of plumbing, such as dishwashers, sinks, and toilets. However you may not have been able to see it for awhile, but it is the owners responsibility to maintain their home.

Water heaters blowing up: These can cause more than water damage with the force released. I would add a water sensor near your water heater, like with a sump pump, so you can get alerts.

Roof leak: This is usually from a hole in the roof, or flashing that is not sealed well. You could have water coming in to your home in all kinds of creative ways.  

Water coming in windows: This is typically not covered and seen as a maintenance issue. If you have basement windows, make sure to clean out outside debris, especially if there is a drain so that water can drain properly. You also want to make sure the pipe/drain systems are working so that it does not back up. Sometimes tree roots can cause piping to break.