Is your home protected by insurance in the event of water damage?
Homeowners insurance may protect against water damage, depending on how the damage occurred. Insurance does notprovide protection if the damage occurs as the result of a flood, neglect, purposeful action, or lack of maintenance.
Below are circumstances under which homeowners insurance does cover water damage:
As is typical of insurance, caveats and special considerations apply. Let’s dive into the details and learn more about water damage and home insurance.
Coverage availability may vary depending on the type of homeowners policy you have, but water damage is usually covered if it's sudden and accidental in nature. The Insurance Information Institute (III) lists covered water claims as any damage from water that comes from the top down, e.g., rain, snow, or ice.
Homeowners insurance also covers water damage caused by burst pipes, sprinklers, and accidental overflow from appliances.
A peril is a source of loss. Most insurance companies write policies as "open peril" or "named peril." A named peril policy covers your home and personal property against only those perils specifically listed on your policy — usually 16 different circumstances. Named peril policies place the onus on you to prove the damage was the result of a covered peril in order for coverage to apply. An open peril policy is more comprehensive, covering all dwelling damage except what is explicitly excluded.
To file a water damage claim with an open peril policy, you would only have to prove to your insurance company the damage was not caused by a specifically excluded cause of loss. On an HO-5 policy, the following perils (cause of loss) are not covered:
If you can afford it, consider insuring your home with an open peril policy to attain greater protection against water damage.
Many homeowners insurance providers cover mold and fungi removal — or offer mold remediation insurance as a policy add-on. Mold insurance covers the cost of cleaning, testing, and removal of mold (up to your coverage limit). In order for homeowners insurance to cover mold remediation, the source of the mold must be a covered peril.
A standard homeowners policy does not cover flooding, sewer backups, acts of negligence, or poor maintenance. Let’s assess each of these perils and how to prevent further damage to your home or add additional coverage.
Given the exorbitant costs of flood damage, home insurance providers exclude flood coverage. In order to have any coverage, you should purchase a separate flood insurance policy from the National Flood Insurance Program. Backed by FEMA, an NFIP policy limits coverage to $250,000 for the structure of your home and $100,000 for personal property.
A sewer backup can cause thousands of dollars of damage, but most standard homeowners policies do not offer coverage. A sewer backup can happen for one of many reasons — for instance, a system could be old, damaged by tree roots, or just become clogged over time. In order to have coverage for the damage done to your home, you need to add Sewer Backup Coverage.
Sewer home insurance coverage comes in the form of an endorsement — a change or addition to a standard policy. A sewer damage endorsement can also insure your home against damages caused by sump pump failure. A sump pump is a device which prevents basements from overflowing by dispersing water equally. If a sump pump fails, it can result in flooding and subsequent water damage. A sump pump failure endorsement ensures your insurance company should cover the damage.
There is no insurance coverage you can add or buy to cover water damage occurring as a result of negligence or poor maintenance. If you ignore a leaking pipe, leading to mold damage, your insurance company might not cover the subsequent costs. Below are common examples of negligence or poor maintenance resulting in a lack of coverage:
The process of filing a homeowners claim doesn't vary much by cause of loss. The first thing to do when you notice water damage is to take pictures of the surrounding area. From here, contact your insurance company immediately and they will handle the claim.
Typically an insurance adjuster will:
*This is an oversimplified explanation of this process. Depending on the complexities, it can take a long time to determine the cause of loss from water damage. You can expedite this process by insuring your home and contents on an open peril policy. An open peril policy only requires the claims adjuster to determine the excluded perils did not cause the damage.
A water damage claim on your record can be quite impactful; on average, rates were hiked by 19% after a water damage claim. Water damage causes the fifth-highest increase in premiums nationally — the first being fire claims. See the below table to see data on up to three water damage claims.
| Number of Claims | Average Annual Premium | % Difference |
| No Claims | $1,256 | - |
| 1 Water Damage Claim | $1,495 | 19% |
| 2 Water Damage Claims | $1,546 | 3% |
| 3 Water Damage Claims | $1,608 | 4% |
If you're looking for cheap homeowners insurance after a water damage claim, take a look at some of the post-water damage claim rates from top insurance companies below to get started in your search. Remember that our rate-gathering methodology likely does not match your own homeowners profile exactly.
| Insurance Company | Rate After Water Damage Claim |
|---|---|
| Allstate | $1,859 |
| American Family | $1,754 |
| Farmers | $2,108 |
| Liberty Mutual | $1,702 |
| Nationwide | $1,541 |
| State Farm | $1,313 |
| Travelers | $1,735 |
| USAA | $1,609 |
With a monthly premium of $109, State Farm proved to be the cheapest company after a water incident. Nationwide and USAA are also worth looking into if you're concerned with the affordability of your rate after a water damage claim.
One of the best ways to secure a good deal on homeowners insurance is to shop around and compare rates. Use The Zebra's comparison tool below to compare quotes side-by-side and see how much you can save!
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