Buying a home is one of the biggest investments any person, couple, or family can make. Therefore, our homes need to be insured properly with the right amount of coverage and limits against the different hazards they are up against such as water damage. According to the Insurance Information Institute (iii) water damage is one of the most common and costly disasters affecting U.S. residences, and accounts for billions of dollars in losses to homeowners and renters annually.
Imagine a fierce thunderstorm went through your city while you were sleeping at night. You wake up only to find water in your finished basement because your sump pump failed. Water has damaged the basement floor, carpeting, the bar, personal belongings in the storage room and the two bedrooms. Water damage is a major factor in homeowners insurance claims. The Insurance Information Institute’s Facts and Statistics on Homeowners and Renter’s Insurance stated water was the third-leading cause of claims from 2014-2018 with an average of $10,949 per claim. Did you also know, it is five times more likely for a home to be damaged by water than to have a claim for theft, and water damage is seven times more prevalent than fire.
What Types of Water Damages are Covered and Not Covered Under a Standard Homeowners / Renter’s Insurance policy?
Standard homeowners and renter’s insurance does provide coverage for burst pipes, wind driven rain and damage resulting from ice dams on your roof. Some policies may also cover sewer and drain backups, but many policies do not. One great benefit with insurance carriers is that you can purchase sewer and water backup coverage which can be added to your homeowners or renter’s policy. The premium for this additional endorsement is surprisingly quite affordable and various limits are available. If most of your basement is finished, you may want to consider a higher limit.
Water damage from flooding is not typically covered by a standard homeowner’s policy. “Flood”, in insurance terms, is when water outside your home rises to a point that it enters your home. Flood Insurance can be purchased from the federal government’s National Flood Insurance Program (NFIP), and from some private insurers. Flood insurance will not cover water damage for burst pipes and sewer or water backup, which is why it is important to understand the difference in types of water damages and how it applies to your homeowners and flood insurance policies.
To learn more about water damage, homeowner’s insurance, and flood insurance policies, contact Paroubek Insurance today and get the knowledge you need to make sure your home is protected with the right coverages and policy limits.
Sources:
https://www.investopedia.com/terms/w/water-damage-insurance.asp#citation-1
https://www.iii.org/press-release/water-damage-whats-covered-whats-not-111809