Whether it’s a burst pipe or an unexpected flood, water damage can happen to any homeowner. It can range from being a headache to completely devastating. In fact, water damage is one of the most common causes for home insurance claims.
According to ISO, water damage claims are second only to wind and hail damage. Yearly, about 1 in 50 homeowners will be impacted by water damage. While most homeowners insurance policies cover some level of water damage, many homeowners still have questions about what is covered in those policies and why certain things, like “gradual damage” may not be. Plus, there are exceptions that complicated these claims even further.
Instead of drowning in the complications of water damage claims, here are some basic guidelines to understanding water damage claims through homeowners insurance.
How Insurance Works
First, let’s take a look at how homeowners insurance works and what’s involved in making a claim. Look at the declaration page of your insurance policy to find out what your deductible is and whether it applies to your loss. The claims process may involve meeting with adjusters and getting approvals for repairs or estimates. In the case of water damage, this could include figuring out the cost to repair pipes and replace anything that was damaged by the water. Depending on your insurance policy and the particular water damage event, your personal possessions that were damaged may or may not be eligible for replacement. And if they are eligible, they may only be so for the current cash value.
It’s worth your time to ask your insurance agent any questions about how your homeowners policy works. You should check with them to ensure that your policy sufficiently measures your risk and can pay out in case of disaster. Insurance agents will also work with providers to help you get the service you need to fulfill the claim.
Different Types
of Water Damage
Whether or not water damage is covered under your homeowners insurance policy depends on what type of water damage it is. Some of the most common types of water damage or causes of water damage that homeowners may experience are:
- Sudden or accidental discharge
- Sewer backup or water backup
- Overflow
- Flood
- Storm-related water damage
If you live in an area that is prone to one of these types of water damage, such as a flood zone or a region that has frequent and heavy precipitation, it may be worth checking with your insurance agent about your coverage.
So
is it covered?
After you’ve experienced water damage, this is likely one of your first questions. It doesn’t matter if you own your own home or condo, or are renting, you want to make sure you have help paying for any damages.
The answer to the question of whether water damage is covered depends mostly on the source of the damage, the type of policy you have, and if the damage is accidental, sudden or gradual.
Accidental damage and sudden damage are pretty well understood by most people, but gradual damage might be a term you haven’t heard yet. Much like the name suggests, gradual damage is that damage that happens over a longer period of time, rather than a sudden storm or an accidental leak. Unfortunately, gradual damage is often not covered by insurance policies, yet it’s a common insurance claim.
Water Damage, Gradual Damage,
& Your Home
Our homes are full of areas we may not see every day — or even every year! There are places full of wires and pipes and ventilation. These are complex structures and behind those parts we see every day — like the floors, ceilings, and walls — are all the places that water damage and gradual damage can happen.
Because there are so many important and intricate parts of your home that you don’t see every day, keeping up with the care and maintenance of your home and regularly checking on those key components is essential. becoming aware of damage in the early stages will save you in the long run, especially since that long-term gradual damage is often not going to be covered by your insurance policy.
While there are plenty of different types of gradual damage that can happen, here are a few examples of gradual water damage to keep an eye out for :
Plumbing, faucets, or pipes leaking and
causing damage to walls, ceilings, and floors.Flashing, tiles, shingles, or deteriorating
parts on the roof, indicated signs of needed
repairs.Deteriorating electrical wiring
Seepage from cracks in the foundation or
exterior of the home, allowing water to come in.Mold, rot, or corrosion
Poor repairs or lack of repairs to your home.
Any one of these types of gradual damage can cause your water damage claim to be denied. Although damage may be sudden to you, the underlying cause may not be sudden, meaning an insurance company could say the damage is gradual.
If you are concerned about water damage in your home that may be from a long-term, gradual problem, speak with your insurance agent or advisor to review the exact details within your homeowners insurance policy.
Examples of Common
Gradual Water Damage
Claims
One of the first examples of gradual water damage many people think of is mold. If the mold is related to a previous claim that was covered, you may also be covered for the mold if you have comprehensive insurance. However, there are many conditions and requirements for these types of claims. It also can vary state to state, even with the same insurance company.
Another example that illustrates the complexities of water damage claims is damage to the home, for instance from a tree falling on your home. If the tree falling causes damage that opens your roof, allowing water to come into your home, it’s likely the damage to the structure of the home will be covered. But, say you notice water-related damage directly relating to the tree falling into your home. If you act quickly and the gradual damage is a direct result from the original structural damage, your insurance company may approve the claim.
What Is
“resulting damage?”
These previous examples bring us to another aspect of water damage claims: resulting damage. This type of damage is different from the initial damage, like water damage after a tree falls into your home. This is another time to speak with your insurance representative about what damage is covered and what coverage you have for resulting damage.
Your claim was denied.
Now what?
Your first move when an insurance claim is denied is to ask for a full explanation. As a policy holder, you have the right to know what areas of your policy wording exclude your claim for compensation.
It’s also important to know who to speak with. There are several people involved in approving or denying an insurance claim. You should keep track of who told you the claim was denied and always ask for clarification to avoid a misunderstanding. Typically, you should receive the official decision in writing.
If you still have trouble understanding your coverage and why a claim was denied, don’t be afraid to speak with your insurance agent or representative. They can help you review the decision and provide a second opinion. Because home repairs, especially those caused by damage, can be highly stressful, you can’t be too careful when it comes to your understanding of coverage.
Once you have a clear understanding of the reason a claim is denied, ask whether or not you could have been covered for these types of damages, in case something similar happens in the future. If you don’t have the coverage for the specific type of damage already in your policy, talk to your insurance representative about how to add it.
If you believe that your claim was denied in error or that something is wrong with the decision, consider seeking out a licensed professional or consumer advocacy organization familiar with insurance in your area. They can offer a second opinion or advice on how to proceed. You can also contact your state insurance commissioner for guidance.
Tips to Avoid Water
Damage Claim Denial
First, keep detailed records. As the homeowner, you should always keep track of any repairs or upgrades made to your home. Proving that you have, in fact, kept your home in good repair and well-maintained could be the deciding factor in whether or not a claim is denied.
Along with keeping records of repairs and upgrades to your home is performing regularly, professionally-done maintenance. Consider setting a schedule for your home maintenance, like every spring and fall, again being sure to keep records of the maintenance.
It’s also important to understand all the coverages within your homeowners insurance policy. This also includes understanding exclusions and your responsibilities. Sit down with your insurance agent or representative if you have any questions about your coverage. Be sure that you have the appropriate amount of coverage and the best options for your needs.
