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Q: I recently had a pipe burst in my home, causing all kinds of damage to the drywall, ceiling, and floor. I’m trying to determine how to go about getting it repaired. In general, does homeowners insurance cover water damage? Or will I need to pay out of pocket for the repairs?
A: The answer to the question “Does homeowners insurance cover water damage?” (or “Does renters insurance cover water damage?” for renters) is yes, but only if the damage was sudden and accidental. The cause of a burst pipe will be important for the homeowners insurance company to determine whether repairs are covered by the policy. For instance, if the burst pipe resulted from cold weather and the policyholder took precautions to prevent it from happening, that will likely be covered by the homeowners insurance policy. However, if the policyholder went on vacation in the middle of winter and turned off the heat in their home, then returned to a burst pipe and water damage caused by their negligence, their claim is likely to be denied. Learn more about when homeowners insurance tends to cover water damage and when it does not.
Homeowners insurance policies typically cover water damage if it is sudden and accidental.
The key term when determining the answer to the question “Does homeowners insurance cover water damage?” is “sudden and accidental.” If the event that caused the damage happened in a way that a homeowner could not predict or prevent, it’s considered sudden and accidental and is likely to be covered by homeowners insurance. While learning how to make a successful water leak insurance claim, it’s important for homeowners to know what counts as sudden and accidental.
The events that a standard homeowners insurance policy typically covers are referred to as “perils.” These include windstorms, fire, lightning, and falling objects. As covered perils relate to water damage, policies from the best homeowners insurance companies (such as Allstate) often cover accidental discharge or overflow of water or steam from a plumbing, air conditioning, heating, or fire-protection sprinkler system. If these water systems in the home suddenly or accidentally break apart, crack, burn, or bulge, these perils are also usually covered. Sometimes a freezing plumbing system that goes on to cause damage (like a burst pipe) might be covered if it is deemed sudden and accidental, and not the result of some type of negligence, like not properly insulating pipes.
There are two types of coverage that can help pay for water damage repairs: dwelling coverage and personal property coverage.
Does insurance cover water damage? If a home sustains water damage that is deemed sudden and accidental, there are two types of coverage on a homeowners insurance policy that could help cover what was damaged. It’s important for homeowners to know which types cover loss if they’re wondering how to get insurance to pay for water damage.
The first type is dwelling coverage, which protects the structure of the home itself. For instance, if a pipe burst suddenly and floods the basement, dwelling coverage would help cover damage to the structure of the house, like replacing drywall or carpeting if the basement was finished. Similarly, if a plumbing fixture bursts in the bathroom and requires the homeowner to redo the bathroom, dwelling coverage would handle repairs to any structural fixes in the bathroom, like the flooring.
The second type of homeowners insurance that could cover water damage is personal property coverage, which covers possessions that were damaged by the covered peril. If that same pipe burst in a finished basement, personal property coverage would cover the cost of items like TVs, computers, furniture, or items in storage that sustained water damage.
How much does insurance pay for water damage? Homeowners insurance usually offers either actual cash value or replacement cost coverage for possessions. Actual cash value will pay out the depreciated value of the item, while replacement cost covers the cost to replace the item at today’s prices. As such, replacement cost coverage is usually the best choice if a homeowner is concerned with how to maximize a water damage claim in the event one occurs.
Before either type of homeowners insurance coverage pays out for water damage, the homeowner will likely need to pay a certain amount out of pocket, called a deductible. Deductibles are standard with most types of insurance, including homeowners insurance. Once the homeowner has paid the deductible amount determined by their policy, the rest of the cost for repairing or replacing damaged items will generally be covered by dwelling or personal property coverage. Depending on the extent of the damage and the deductible amount, the homeowner may decide to pay for the repair or replacement costs themselves rather than filing a claim.
Homeowners insurance typically covers water damage caused by a roof leak, burst pipes, storms, ice dams, and extinguishing a fire.
Is water damage covered by insurance? Sometimes, but one of the key water damage insurance claim tips is to be aware of the circumstances for which coverage will likely apply. Above were some of the main categories of what is covered by homeowners insurance. However, there are other specific perils related to sudden and accidental water damage that homeowners insurance may be likely to cover.
For instance, roof leaks are usually covered by homeowners insurance if they are caused by a covered peril. Does homeowners insurance cover water damage from rain? Possibly; for instance, if that roof leak happened because of damage from a windstorm, it will most likely be covered because windstorms are usually covered perils listed in standard homeowners insurance policies. Burst pipes are some of the most common covered water damage incidents because a burst pipe can be a sudden and accidental event, even with proper maintenance. If a drastic storm causes other water damage, such as a fallen tree branch that takes out a window and causes rainwater to soak the interior of the home, that is also likely to be covered. Ice dams also tend to be covered, as homeowners insurance covers damage from extreme winter weather, like weight of ice, snow, or sleet on the home. Finally, extinguishing a fire might count as covered water damage if the fire needed to be put out with a hose or other water source that then also drenched the home and personal possessions.
However, homeowners insurance will not cover water damage caused by neglect or lack of maintenance, water backup from a drain or sewer, ground seepage, or a flood.
While homeowners insurance can and does cover many different events, there are also several common events that homeowners insurance won’t cover. As stated, for the event to be covered by insurance it typically has to be deemed sudden and accidental. That means anything that happens due to neglect or lack of maintenance by the homeowner will typically not be covered. So if that pipe burst because it was clearly rusting through and no effort was made to fix it, then water damage from that burst pipe would likely not be covered by the homeowners insurance policy. Homeowners might also be found negligent in cases where a pipe freezes but the outside water lines were not turned off in winter or no effort was made to insulate vulnerable pipes. Old and corroded plumbing fixtures that burst are also not likely to be covered.
“While some water damage is covered by home insurance, including water damage caused by burst pipes, several types of common water damage are not covered, including the following sewage backup, sump pump failure, and flooding,” explains Angel Conlin, chief insurance officer with Kin Insurance, which provides homeowners and renters insurance policies in eight Southern states.
Other common incidents that are not covered are often related to flooding issues. As far as water damage goes, standard homeowners insurance policies tend to cover any sort of top-down water damage, such as damage from a roof leak in a storm or a burst overhead pipe. That means drain or sewer backups, ground seepage, or flooding water damage is not often covered. These are considered bottom-up water incidents. However, there are add-ons homeowners can choose to cover these incidents “Most insurance companies offer an endorsement to cover water backup and sump overflow,” explains Conlin. “A water backup coverage endorsement is usually an inexpensive add-on that may cover damage to your property that’s caused by water backing up from a drain or sewer, or water overflowing or being discharged from a sump, sump pump, or related equipment.”
Another point to remember is that homeowners insurance typically does not cover mold. Mold tends to grow from a long-neglected presence of moisture in a space, which means that it is considered preventable with proper maintenance by the homeowner.
“For mold to be covered, it has to be the result of a covered peril,” says Conlin. “For example, let’s say a tree branch damages your roof and leads to a leak that causes water damage and subsequent mold growth. Most homeowner’s policies are likely to cover at least some of the mold damage in that scenario. It’s important to check with your insurance company to see if they have any limits related to mold coverage.”
Purchasing additional insurance policies, such as flood insurance and water backup coverage, can add extra protection against water damage.
Homeowners who are concerned about bottom-up water damage do have some water insurance coverage options. They can shop for additional homeowners insurance through add-ons, which are sometimes called riders or endorsements. One example of this is water or sewer backup coverage. This protects homeowners in the event that water damage happens from water backup in sewage, which causes water to enter the home through drains.
“Unfortunately, many homeowners don’t realize their home insurance policy excludes flood coverage,” says Conlin. “While standard home insurance can cover water damage from internal sources, like a burst pipe, it doesn’t cover flood damage caused by storm surges. Homeowners have to add flood insurance to their coverage or purchase it as a separate policy.”
Flood insurance coverage is offered as a separate policy. This covers many flooding events that happen from natural disasters like heavy rains. Flood insurance is usually required by mortgage companies if a home is in a high-risk flood zone. However, even areas that are not deemed to be high risk could experience flooding conditions if severe weather hits, making flood insurance a good consideration for most homeowners. It’s easy to purchase, but it does often come with a 30-day waiting period before coverage takes effect to prevent people from purchasing it only when there are flood conditions. Homeowners will want to read more about the best flood insurance companies to determine which is the best choice for them.
Homeowners insurance usually won’t repair or replace the source of the water damage, so a home warranty can help cover these costs.
Another point to keep in mind is that homeowners insurance only covers what has been damaged by the water, such as the structure itself or personal possessions. That leaves homeowners with the responsibility of replacing whatever caused the water damage. For instance, if a water heater broke suddenly and accidentally, then the homeowner would have to replace that water heater or pay the bill to get it repaired. So the answer to the question “Does homeowners insurance cover pipe replacement?” is likely no. A water damage insurance claim only covers the dwelling and personal possessions, not the item that caused the damage.
Many homeowners don’t like that feeling of being unprotected for major expenses, so that’s where purchasing a home warranty can give added coverage. Home warranties are service agreements that can repair or replace certain systems or components that fail in the home. A contract from one of the best home warranty companies (such as American Home Shield or Choice Home Warranty) vary, so homeowners might consider shopping around to make sure the home warranty covers what they want to be covered. Some home warranties might require additional coverage purchases to cover the major systems that cause water damage, like water heaters or plumbing fixtures.
