May 9, 2022


Does homeowners insurance cover water damage

No one wants to come home to discover that their basement is flooded or their roof is leaking. It’s even worse when homeowners insurance doesn’t cover the damage to your home and personal belongings. 

Homeowners insurance can cover water damage, but it depends on the circumstances and your policy. If the water damage is caused by something sudden, accidental, and out of your control, it’s usually considered a covered peril. However, your insurance company won't pay for it if it’s gradual damage or the result of years of wear and tear and poor upkeep. 

In this post, I will discuss:

  • When your home insurance covers water damage (and when it doesn’t)
  • How much coverage you’ll receive for water damage
  • What causes water damage?
  • The key difference between water damage and flood damage
  • How to recognize signs of water damage
  • What to do when water damage happens
  • What to do if the damage isn’t insurable
  • How to prevent water damage

Let’s get started with this post.

When Does Your Standard Homeowners Insurance Policy Cover Water Damage?

As I mentioned, your standard homeowners insurance policy covers water damage when it’s sudden and accidental. For example, if a pipe in your wall suddenly bursts, you’ll be covered. 

I’ll dive deeper into the causes of water damage later on, but for now, here are a few instances when your standard policy typically covers water damage:

  • Pipe bursts or frozen pipes*
  • Frozen or faulty plumbing
  • Water damage while extinguishing a fire
  • Accidental overflow of a fixture or appliance, like your toilet or washing machine
  • Vandalism
  • Rain or snowstorm damage
  • Weight of snow, sleet, or ice

*While home insurance covers the damage caused by a burst pipe, it doesn’t cover replacement costs for the pipe itself.

Standard homeowners insurance policies also cover water damage if you have mold or fungus growth or a leaky roof, but they fall into more of a gray area. Your policy will cover mold damage if the damage results from something else you have coverage for. Meanwhile, coverage for a leaky roof usually only applies to your home’s interior, not the roof itself. However, unless the cause of your roof leak is expressly excluded from your policy, it’s usually covered.

When Does Your Homeowners Insurance Exclude Water Damage?

Your policy won’t include water damage if you’ve neglected to maintain your property. For example, if you’ve known about a small leak for months now but chose to ignore it, your homeowners policy won’t cover you when it leads to substantial property damage. As a homeowner, it’s your responsibility to stay on top of repairs. Your homeowners policy also excludes:

  • Flooding
  • Water or sewer pipe backups
  • Ground seepage
  • Poorly-maintained pipes

If you’re experiencing mold growth or a roof leak because of something your policy excludes, that won’t be covered. Many homeowners insurance companies offer add-ons or endorsements for each situation (excluding neglect), so you can get coverage when you need it.

How Much Coverage Do You Get For Water Damage?

Roughly 2% of homeowners file water damage or freezing claims each year. These claims are the third most-costly type of home insurance claim. On average, these claims pay $11,098

Depending on what’s damaged, standard homeowners policies can provide coverage in two ways: dwelling coverage and personal property coverage.

Dwelling Coverage

Dwelling coverage pays for covered perils that cause damage to the structure of your home. For example, if a snowstorm damages your roof and water seeps through, dwelling coverage will help pay for the repairs once you’ve reached your deductible limit. 

When it applies, you will also have coverage for mold remediation. Depending on your insurance coverage, you typically have somewhere between $1,000 and $10,000 in protection.

Personal Property Coverage

If you have personal belongings that are damaged during an event your policy covers, that policy will help pay for them up to your coverage limit. For example, your homeowners insurance will cover costs if that same snowstorm damages your roof, and then water spills into your attic and destroys the artwork you’ve stored there. 

While dwelling coverage will usually cover you for the total amount of replacement costs, your personal property coverage could have lower limits and sub-limits. For example, you might have $100,000 in general personal property coverage but only $1,500 for jewelry. If water damage destroys $3,000 worth of jewelry, you’ll be covered for the first $1,500. Read through your policy carefully to see what you’re covered for and determine whether that’s enough for your belongings.

Simply put, when water causes structural damage, you’re likely covered for everything, minus your deductible. When water damage destroys your personal belongings, you’ll be reimbursed until you reach your coverage limitations or sub-limits.

What Causes Water Damage?

Water damage occurs when water intrudes on your home’s structure and damages—and in some cases even destroys—it. Here are some of the most common causes of water damage:

  • Faulty appliances. Malfunctioning washing machines and water heaters can cause water to collect in pools and damage your floor. If these appliances start to rust or make noise, it may be time to replace them. 
  • Faulty plumbing. Water leaks in your plumbing system are the most common cause of water damage. Leaks can occur when pipes begin to rust when there are high water pressures, extreme temperatures, or when pipe joints become weak.
  • Harsh weather conditions. Heavy rain, hail, or snow can cause water damage even if you’ve been keeping your home well maintained. 
  • Clogged gutters. When your gutters clog and become blocked, water begins to pool and overflow near other structures of your home, damaging them. 
  • Burst pipes. When your pipes get old and rusty, they’re more likely to burst. Also, your pipes can burst when there’s a significant temperature change. When the ice in your pipes expands, it can cause them to burst. 
  • Overflow. Don’t forget to turn off the sink and tub faucets. When water overflows, it can damage your floors, seep into your carpet, and lead to mold growth and a stench of mildew. 
  • Septic tank backup. Heavy rain can cause your septic tank to overflow. When it does, the waste backs up to your house. It can also cause your sewage to back up, potentially creating a health hazard. In extreme cases, you may have to relocate until the sewage system gets repaired. It’s not pleasant.

What’s The Difference Between Water Damage And Flood Damage?

What’s The Difference Between Water Damage And Flood Damage?

Water damage and flood damage are very different when it comes to home insurance. 

Water Damage

Water damage is usually caused by something internal, like overflowing washing machines, burst pipes, leaking plumbing, a leaky faucet, or a broken dishwasher.

Flood Damage

Flood damage is usually external and caused by heavy rain or a natural disaster, such as a hurricane. It can also be caused by roof leaks, flash-flooding, or sump pump failure. 

Unless poor maintenance is involved, your home insurance policy will likely cover water damage. However, you’ll need a separate policy for flood insurance. Standard home insurance policies don’t cover flood damage.

How To Recognize The Signs Of Water Damage

It’s not always easy to discover water damage, and sometimes when you do, it’s already too late. However, here are a few things to look out for:

  • Increased water bills. Have your utility bills spiked recently? If so, a hidden leak could be the culprit. 
  • A moldy smell or stench of mildew. As soon as you smell it, try to sniff out the source. If your home begins to smell funky, it could be because of water damage or mold. 
  • Discoloration. If you notice wet or dark spots on your ceiling or walls, it’s likely because there’s a leak you’re not seeing. 
  • Bubbling, flaking, or cracking. Similar to above, if your paint or drywall is beginning to bubble, flake, or crack, it’s probably water-related.
  • The sound of running water. If you’re able to hear a drip or even the sound of running water, there’s probably a leak somewhere, even if you can’t see it. 
  • Standing water. If water collects somewhere and returns after you’ve wiped it up, it could be because of a burst pipe or a malfunctioning appliance. 

What To Do When Water Damage Happens

What To Do When Water Damage Happens

Here are a few things you can do to minimize potential damage. They can mean the difference between getting your insurance company to cover it or not. It can also save you thousands of dollars in damages.

Identify The Source Of The Damage

Look for the signs of potential water damage to get to the source. If you have valuable belongings near where water is pooled or leaking, move them somewhere safe. You don’t want any furniture, artwork, or other items damaged. Also, use buckets, towels, tarps, garbage cans, and whatever else you have handy to contain the water leak or pool. The more you contain, the less damage it can do.

Document The Scene

Take photos, videos, and write everything down. When it comes time to make an insurance claim, this information will be very helpful. I also recommend sharing photos of the areas of your home that are subject to water damage before the damage took place. Showing what your home and personal belongings looked like before they were damaged or destroyed can strengthen your claim.

Contact Your Insurance Company

Call your insurance agent immediately to inform them of the situation. Be as detailed as possible to ensure you have coverage, and find out what repairs they will and won’t cover.

Make A Water Damage Insurance Claim

After contacting your homeowners insurance company, they should give you the paperwork you need to file your water damage claim. Once you fill it out and send it back to them, the claims process begins.

Contact A Remediation Company

Your homeowners insurance company might have a list of approved contractors for repairs. If you go with a contractor not on their list, your insurance company might not cover it. If they do, contact one of them for remediation. 

Once you know which contractors you can call, contact one of them within 24-48 hours. The faster you can get someone there, the better.

What Should You Do If the Water Damage Isn’t Covered?

If your insurance policy doesn’t cover water damage, you will have to pay for it out of pocket. However, if you believe your policy covers it even though your claim got denied, you can file an appeal with your insurance company or get a second opinion from a licensed contractor. You can also consult with an insurance attorney or contact your state’s insurance commissioner to see if they can help you.

How To Prevent Water Damage

Sometimes sudden and accidental damage is unavoidable. However, if you want to maximize your chances of getting your insurance claim covered, take these steps to protect yourself from potential damage:

  • Inspect your home for water leaks if you see, hear, or smell something, especially in your attic and laundry room
  • Inspect hoses for leaks
  • Clean your gutters regularly, especially after a storm
  • Inspect your roof regularly, especially after a storm
  • Maintain your sump pump
  • Drain water heaters when necessary
  • Keep rain runoff away from your home’s foundation
  • Purchase a hidden water damage policy
  • Install smart water sensors
  • Purchase and install a smart water main shutoff valve

Final Thoughts

It is the sole responsibility of homeowners to maintain their property. Most homeowners insurance policies will cover circumstances that are out of your control, including thermite damage and other factors. 

Even though water damages are often covered by insurance, take preventive measures just in case. 

I also recommend comparing insurance companies and their policies to find the best, cheapest homeowners insurance for what you need. Before signing or renewing a company, read it thoroughly and ask your agent clarifying questions so that you know what’s covered.
About the Author

As a native Washingtonian, Carlos Reyes’ journey in the real estate industry began more than 15 years ago when he started an online real estate company. Since then, he’s helped more than 700 individuals and families as a real estate broker achieve their real estate goals across Virginia, Maryland and Washington, DC.

Carlos now helps real estate agents grow their business by teaching business fundamentals, execution, and leadership.

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