Home insurance typically covers sudden, accidental water damage, but coverage may be limited by policy language. Standard homeowners policies also don't cover flood damage. That’s why it’s important to buy flood insurance if you’re in an area that’s prone to flooding or hurricanes.

Here’s an overview of what your homeowners policy covers – and what it doesn’t – when it comes to floods and water damage.

When does home insurance cover water damage?

If you have a homeowners policy written on an HO3 form, or if you have a House & Property policy, your insurance usually covers damage resulting from sudden, accidental water damage. This includes:

• Water damage that originates inside your home and is caused by a covered peril. 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. Please note: Water damage resulting from failure to maintain your appliances or leaks that occur over a long period of time may not be covered.

• Water damage that results from covered property damage. HO3 and House & Property policies include water damage when it results from a covered loss. For example, say a tree branch punctures your ceiling during a rainstorm. Your homeowners insurance can usually help pay for the water damage that follows because it was caused by a loss policies typically cover. (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 you have House & Property insurance or 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 have either an HO2 or HO1, then you may want to look for an HO3 policy for broader coverage. 

When isn’t water damage covered by home insurance?

Most standard homeowners insurance policies do not protect against damage resulting from floods or hurricanes. If this is a surprise to you, you’re not alone. Many homeowners mistakenly believe that their homeowners policy offers flood protection.

So what does an insurance company consider a flood? The following is a list of characteristics that many insurers use in their definitions of flood:

• 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

• Water that damages your dock or sea wall from storm surge

Additionally, a standard home insurance policy may not cover water damage resulting from:

• A damaged water main.

• Poor maintenance or neglect.

• An earthquake.

• An outside sewer or drain (though you may be able to get an endorsement for water backup and sump pump overflow).

Homeowners who have a risk of flood damage may want to look into getting flood insurance. And who has flood risk? Just about everyone – even if you’re not in a designated floodplain. More than 25% of flood claims come from homeowners who live in low-to-moderate flood zones.

Water damage vs flood damage

In the insurance industry, water damage is damage to a dwelling, other structures, or personal property when it is sudden, accidental, and the result of something other than a flood. 

Flood damage, however, is damage that results specifically due to a flood event. One way to understand that is to consider FEMA’s definition of a flood.  According to FEMA, a flood is a condition where at least two acres of land that are normally dry are inundated with water. 

For instance, flood damage might be due to:

• A coastal or inland water source overrunning its normal boundary

• A sudden accumulation of rain or other surface water 

• A mudslide 

• The collapse of land on the coast of a body of water

The important things to note are that water damage and flood damage are caused by different events and that homeowners insurance doesn’t typically cover flood damage. 

What to do if you have water damage?

If you have water damage, the first thing to do is to take steps to stop the problem from getting any worse. This may mean turning off the source of water, draining or mopping standing water, or setting up fans or dehumidifiers to help dry the affected area. 

Next, you’ll want to record all damage before repairs start. You should actually continue recording as work progresses and until it’s completed.

Finally, file a claim with your insurer. Your claim should include the damage to your home and other structures as well as any affected personal property.

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 furniture, then 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.

A special note on flood insurance for homeowners

One final consideration regarding homeowners insurance in Florida and other coastal states: While hurricane wind damage 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 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. Be sure to speak to your insurer about how to get covered for this common risk.