Is Water Damage Covered by Insurance?

With water damage, you may have to deal with a lot of different factors before your home is dry again. One of the first concerns, naturally, is whether water damage will be covered by home or renter’s insurance. The good news is that it is often times covered. The bad news is that there’s more to it than a simple “yes” or “no”.

Here’s what you need to know.

What Caused the Damage?

The first thing that you want to consider is what caused the damage. Some instances are not covered by insurance inherently. Others may be specifically excluded from your policy, such as if you don’t purchase water backup coverage and your insurer requires it to have a separate policy rider in addition to home insurance. Insurance companies may not cover:

  • Natural floods and tsunamis
  • Standing water or groundwater backup
  • Sewer or drain backup
  • Failed sump pump from power outage

It’s always best to talk to your insurance agent about what water damage coverage you have when you purchase a home insurance policy and make sure that you get whatever coverage you can, even if it requires an additional purchase.

Flood insurance is a tricky business and requires its own policy—be sure to work with a FEMA-approved flood insurance provider if you need this coverage.

How Much Damage is There?

Although insurance companies will not necessarily “refuse” a claim because it’s so cheap, you likely won’t want to file an insurance claim for less than $500 worth of damages when your deductible is $1,000. It would make more financial sense just to pay for the damages out of pocket and save the insurance claim in case something big happens where the deductible will be a nominal expense.

Insurance companies may also send their own adjuster to inspect the damage and determine what needs to be fixed and what its value is — this could differ from the quotes that you get from your water damage restoration company. Regardless, it’s the way that they estimate replacing your physical property and repair expenses with financial compensation. Typically the restoration company and the insurance company use a standardized cost estimating system that’s fair for everyone.

You can always go back and forth with the insurance company if you don’t agree with their estimates, but again that’s a lot of hassle if the damage is nominal, so you’ll have to decide what’s best after you see what the situation is.

The Bottom Line

In most cases, insurance companies will take care of water damage repair expenses and other related costs. They may even pay for the related repairs or the root cause of the issue if it can be proven that it falls under a coverable event or act.

The best thing that you can do is call your insurance company and your licensed water damage restoration professional so that you can understand your options and make the best decision about how to proceed. Insurance may or may not cover your water damage, but what’s more important is making sure that you get the best outcome, no matter who foots the bill.