Water Coverages Explained
Not all water damage is the same! Just this morning, you probably used the water in your home to brush your teeth, shower, feed your kids, and make your coffee. This constant daily use of the same pipes and the same plumbing system, day after day, year after year has the potential for damage. If not inspected and/or updated in a timely and professional manner, it can be a serious financial burden to any family if something were to go wrong. In this article, we will talk about four common water coverages, that could help better protect you and your family from future financial burden due to water damage in your home.
What water damage does my homeowners policy cover me for?
The only water coverage that comes included on most basic homeowners’ policy is called sudden and accidental water damage. However, another coverage that can be endorsed is called water backup.
If you live in Texas, read on to learn more about two other coverages that can be endorsed on your homeowner's insurance policy: foundation water damage coverage and seepage.
What is sudden and accidental water damage?
Sudden and accidental water damage covers discharge or overflow of water or steam from within a plumbing, heating, or air conditioning system, or household appliance. This is typically included up to the policy limits with most “HO3” policy types. (Your policy type is usually referenced at the top of your declarations page – the HO3 policy is the most common). For example, if your dwelling is covered at $400,000, then you would have coverage for up to $400,000 for sudden and accidental water damage.
Example: Kelly owns a home in Colorado. In February of 2013, the temperature dropped to 10 below zero, causing the pipes to freeze and burst. Kelly woke up to 4 inches of standing water on the first floor of her home. The cost to repair the flooring, walls, and contents damaged was $30,000. Kelly’s deductible was $2,000. Kelly's homeowners insurance policy covered sudden and accidental water damage. Therefore, her insurance paid to repair the damage minus Kelly's homeowners deductible. So her policy paid $28,000 to repair the damages.
What is water backup insurance?
Water backup is an endorsement on your homeowners insurance policy that covers damages caused by water backing up into your home. Usually, this type of backup comes from sewage lines, sump pumps, or drain lines getting clogged and the only way water can flow is “back up the direction it came from.”
Water backup can usually be endorsed for $5,000, $10,000, or $25,000 in coverage and is sometimes subject to its own deductible. Be sure to check with your agent about getting this added to your policy.
I’m in Texas! What's foundation water damage?
Like we mentioned, Texas has an extra coverage you can endorse on your homeowners policy that isn't available in all states.
With “foundation coverage” endorsed, you can expect to have coverage to repair or replace your foundation if something were to happen to a pipe bursting or water leak under the home. To be clear though - this will not cover you for the natural shifts in your foundation that cause doors to jam, or swing open. Foundation coverage will not cover the wear/tear that happens as your home ages.
More specifically, this is very valuable to homes with a slab foundation, because if there was damage under the home, the only way to get to the issue is by digging up the foundation. If you have foundation water damage endorsed, you are covered for fixing the foundation up to the amount of coverage you selected.
Most insurance companies will offer this coverage at 15% of the dwelling amount listed on your policy. In that case, if your home is covered for $400,000, then the policy would pay up to $60,000 to repair your foundation.
I just found a leak in my house that's been causing damage for a while, will my insurance cover the damage?
Oh no! I know that isn’t a fun situation to deal with. Luckily there is an endorsement available to be added to homeowners policies in certain states called seepage water damage. Seepage coverage protects you from any “slow drip” leaks that happen to go on for more than 14 days and you don’t notice them...
If you do have seepage coverage, most carriers will cover your home up to the policy limit. This coverage is especially valuable if you travel often or have an older home.
Example: If your home (dwelling coverage) is covered up to $400,000 and you have seepage endorsed up to your policy limit, you will have coverage available up to $400,000.
Remember, you also have a coverage called sudden and accidental water damage that covers you for any sudden leaks that cause damage for 14 days or less.
Just like you should walk through every coverage with your agent, it’s best to check with them about the specifics of your water coverage on your policy. You never know what could happen, and it is always best to be prepared.
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