Homeowners insurance does cover some types of water damage, but a standard policy does not cover flood damage. That’s important to know wherever you live, but it may be especially key if you’re in an area that may see hurricanes.
The official start of hurricane season in the Atlantic is a few months away – that’s June 1, so mark your calendars! – but it’s never too early to prepare. Asking questions about how your homeowners insurance handles water damage can help you ensure you’ve got the appropriate coverage in place.
Here’s an overview of what your homeowners policy covers – and what it doesn’t – when it comes to floods and water damage.
What’s covered: Water damage that starts inside your house
Generally speaking, if you have a home insurance written as an HO3 policy, the insurance offers coverage for two types of water damage:
- Water damage that originates inside your home. Pipes and appliances that suddenly burst or start leaking are the two biggest culprits of this type of damage. They can wreak serious havoc, often damaging entire sections of a house, and replacements can be expensive.
- Water damage that results from covered property damage. HO3 policies cover damage from “fallen objects,” so if a tree branch collapses your ceiling during a rainstorm your homeowners insurance can usually cover for the water damage, because it was enabled by the covered fallen tree branch. (Ditto for water that gets in because of other types of covered events.)
There’s a big caveat here, though: this coverage exists, as we mentioned, if your homeowners insurance is written on an HO3 policy. If you’ve got coverage on form HO1 (also called a “named perils” policy) or HO2, you may not enjoy these same protections.
If you’re not sure which type of coverage you have, take a look at your policy. If your current policy is on an HO1 or HO2 form, then you may want to consider calling us or applying for a new policy online.
Florida and Louisiana homeowners can talk to our Kinfolk about getting an HO3 policy. Homeowners in other states will hear about our new House & Property insurance.
What coverages apply?
Assuming your homeowners policy protects against external water damage, then you likely have two specific coverage parts that apply:
- Coverage A. Also called dwelling coverage, Coverage A helps pay for repairs to the structure of your home when it’s damaged by a covered peril. For example, water damage to your floor may trigger your dwelling coverage if it was caused by a pipe burst.
- Coverage C. This is also known as personal property insurance because it covers your belongings. So if that same pipe burst ended up destroying your computer, Coverage C typically kicks in to protect against the loss.
These two coverage parts are the most likely to apply to water damage, but others can be involved depending on the circumstances.
What’s not covered: Water damage that starts outside
Nearly all standard homeowners insurance policies exclude coverage for floods, which insurance companies consider to be water damage that starts outside your home.
If this is a surprise to you, you’re not alone: one study found that 56 percent of homeowners mistakenly believe that their homeowners policy offers flood protection.
So what does an insurance company consider a “flood?” Any of the following:
- Rising waters, whether from unusual rainfall or because of backed up storm drains in your area.
- Rising mud from similar causes.
- Water that flows into your home because of a malfunctioning municipal sewage system.
Flood coverage isn’t just for homeowners in designated floodplains, either: more than 20 percent of NFIP claims come from homeowners who live outside these areas.
The reasons are complex, but one cause could be that NFIP’s maps of floodplains are notoriously inaccurate. Another possible cause? Climate change. As serious storms increase in frequency and severity, flooding will be the new normal for more and more Americans, whether because they’re in a low-lying area or because the local storm drains aren’t able to keep up with the rainfall and debris.
Other types of water damage that aren’t covered
We like to make a point that floods aren’t covered by home insurance because of the amount of damage they can cause. However, other types of water damage are also typically excluded, such as those caused by:
- Poor maintenance and neglect.
- A damaged water main.
- An earthquake.
- An outside sewer or drain. (You may be able to get an endorsement for water backup and sump pump overflow.)
Additionally, home insurance may pay for repairs caused by leaky windows, but it typically won’t pay to repair or replace the windows themselves unless they were damaged in a covered event.
A special note on flood insurance for Florida homeowners
One final consideration regarding homeowners insurance in Florida: while wind damage from hurricanes is covered by standard homeowners policies, it may be subject to a special hurricane deductible. In other words, if you file a claim on your hurricane home insurance, you may be responsible for paying more than your standard deductible toward repairing that damage before you’re eligible to collect funds from your insurer.
That’s one way insurance companies manage their risk during times of high claim frequency.
The bottom line
If you have only standard homeowners insurance, you’re probably not covered for flood damage. If you’d like flood insurance, your Kin representative can help you secure coverage.
Editor’s note: This article was originally published in May 2018. It has been updated for accuracy and comprehensiveness.