April Showers Bring Ma..ssive Floods

If your home or business suffers water damage, would it be covered under your insurance policy?  A homeowner’s insurance policy, and commercial (business) property policy are very similar in what they do and don’t cover relating to floods and other water damage losses.

There are 4 common types of water damage claims that can occur, and not all are covered unless your policy has been properly endorsed, or you secured a separate policy altogether:

1. Roof Leaks

Roof Leaks and resulting damage are usually covered. It depends on what caused the leak.  For instance, if it was damaged by a windstorm or hail, coverage for necessary repairs or replacement usually applies.  There are notable exceptions such as a roof that leaks from normal wear and tear or an already damaged one.

2. Bursting Pipes or Appliances

If your toilet, sink, or appliance (water heater; furnace; refrigerator, etc.) burst or leaked and caused damage to your wall, floor, or contents, these things are usually covered.  The resulting damage is covered, but not the cost to replace the defective or damaged part.

3. Water or Sewer Backup

If your sump pump fails, or water backs up through a drain, the damage to the carpet, flooring, or walls may be covered.  However, this coverage is often only included in your policy if it is specifically endorsed.  For instance, most homeowners policies either exclude it, or provide a minimal limit such as $5,000. You can generally endorse the policy up to $50,000.  A business policy can be endorsed much higher.

4. Flood

Unless a flood policy is purchased, floods are not a covered peril.  A flood refers to surface water, such as that which could come under your front door from outside.  Many people do not buy flood policies unless it is required by law (e.g. If you are in a flood plain and the mortgage company can’t lend money until the policy is in place). Why? Flood coverage is generally very costly.  This does not mean that someone shouldn’t consider purchasing a policy, even if they are not in a flood plain.  Surprisingly, most flood damage occurs on property that is outside flood plains.

Hopefully, the above information is helpful to make sure you are properly covered. Of course, there are exceptions. For example, a leak that has occurred for 14 or more days is often excluded. This is because an insurance policy is designed to cover things that are sudden and accidental, like an act of God, as opposed to losses that could have been prevented by proper or timely maintenance.  The best way to handle any water issues is to call your agent right away! Give us a call or send us an email if you need any other information to make sure you’re covered!