You never know what problems spring rains might bring – but it’s very important that you understand the difference between water damage and flood damage!
The onset of April showers got us wondering how many of our customers understand the difference between water damage and flood damage when it comes to their home insurance coverage. While many people think water damage and flood damage are used interchangeably, when it comes to insurance companies, and repair coverage, they are quite different.
Water damage is usually caused by water that originates from plumbing, such as a back-up from a toilet, a flooded air-conditioning unit, or a washing machine that has overflowed. Any of those could take place on your main floor, upstairs (if you have one) or in your basement (if you have one). Water damage is routinely covered by your homeowner's policy. In fact, it’s one of the primary reasons people have insurance in the first place. But remember, there’s a difference between water damage and flood damage.
Defining what constitutes flood damage is a bit more complex. Generally speaking, flood damage is damage to the home as a direct result of a flooding event. In other words, it must rain enough to create either a flooding event or a flash flood. This can happen during a natural disaster or a hurricane that produces heavy rainfall in a short period of time. It can also occur when you don't have a proper slope for stormwater runoff around your home or when a rain or storm control basin near you overflows.
What about water damage from storms or rain?
Heavy rains may cause water damage without causing flood damage. If the roof of your home is damaged during a storm and rainwater leaks into the house, it is usually considered water, not flood damage. The key difference is the event that caused the damage, in this case, a storm.
In order to have coverage for a flood caused by weather events, a homeowner must have a separate flood insurance rider. If you live in an area with a high risk of floods like along the Meramec River or near creeks that are known to often flow over their banks, it may be possible to add a rider to your existing homeowner policy to cover flood damage. In this case, the homeowner needs to pay attention to any clauses or exclusions in the policy.
When does homeowners insurance cover a flooded basement?
A flooded basement is one of the most ambiguous insurance situations a homeowner can find themselves in. Some situations are covered by home insurance, while others require special types like flood insurance or an endorsement.
If any of the following happened in your basement, you would likely be covered if you have a standard home insurance policy.
Flood Caused by Broken Appliance
If the washing machine, AC unit or refrigerator in your basement malfunctions and floods the entire room, the water damage is typically covered under a standard homeowners insurance policy. However, there is a chance your insurer could argue the damage was a result of lack of maintenance. If they can prove the appliance broke because you hadn't taken care of it for a while, they can deny your claim. A truly faulty appliance malfunction will always be covered however.
Note that the cost of the new appliance itself won't be covered under the claim. So, to be clear: the flooding caused by the broken appliance is covered, but you have to buy the new washer or unit out of pocket.
Flood by Leaking Water Heater
Damage from a leaking water heater is covered under the same provision as leaking appliances. Again, you must be aware whether the water heater is leaking as a result of neglect or malfunction. If your insurer finds any proof the cause of the leak was poor upkeep on your part, your claim will be denied.
Freezing Pipes Burst
If one winter night the temperature drops and your pipes burst from the freezing water, your home insurance policy would cover the damage of that flood. Burst pipes from an AC unit, sprinklers and appliance are also covered if they freeze. The main condition is that you have to be living in the home while it was flooded.
Flood Caused by Overflowing Tub, Pool, Sink, Etc.
If your basement is flooded as a result of an overflowing tub, pool, sink or any other receptacle for water, you would be covered by your home insurance policy. Such a calamity is considered "sudden and accidental" and your insurer will foot the cost for replacing what was destroyed.
When doesn't homeowners insurance cover a flooded basement?
Unfortunately, there are also situations where if your basement is flooded you would not be covered by a homeowners insurance policy. The following situations are not covered by a standard home insurance policy:
Rising Water from a Storm, Surge or Heavy Rains
Essentially, any flooding caused by nature will not be covered under your home insurance policy. For all rising water situations only flood insurance can save your basement--and even then coverage is limited.
Flood insurance covers certain objects in your basement like most personal belongings and appliances, but typically won't cover the structure, such as finished ceilings or floors. When you take out a flood policy, you need to purchase both dwelling and contents coverage to get the maximum coverage for your basement.
The best defense against a flooded basement is a functioning sump pump that pushes water out. Preventing a flood from occurring in the first place will usually be the cheapest and least disruptive option, especially if you have a finished basement.
If an external sewer system backs up into your basement, your insurance will not cover the resulting damage. Sewage backup can be one of the most costly disasters that can befall a home, and there are few ways for homeowners to recoup their losses should it happen.
Most home insurance companies do offer an endorsement for sewage backup, and it is relatively inexpensive. Homeowners with finished basements are strongly encouraged to purchase this endorsement! If you don’t have it now, just give us a call and we’ll discuss your options.
Water Seeping from Underground
This is a tough case for a homeowner to be in, because this situation is generally not covered. After a period of heavy rain, the ground can become saturated with water, and that water can seep through the ground into your basement. Homeowners insurance companies do not consider this a coverable calamity.
Flood insurance also won't cover it unless the seepage is directly related to a flood in the area. The best defense against this disaster is to make sure the foundation of your home is solid and up to date on all inspections.
Overall, it's important to know what is covered and what isn't regarding water damage or flood damage. If you're still not sure, ask us and we’ll clarify for you. It’s also important to understand the amount of coverage provided and the deductible required for both water and flood damage. Deductibles for floods are frequently different than amounts listed for other types of damage or loss. If your home is in a flood-prone area, you might consider contacting the National Flood Insurance Program (NFIP) to help you find the coverage you need.
Do I Need Flood Insurance?
Most people don’t think they need flood insurance, especially if they live in an area where flooding is unlikely. They also tend to believe a flood may not impact them when their home sits at the top of a hill or it is built up several feet off the ground. Still, any home can flood during extreme weather events. The good news is that the less likely a house is to flood, the less costly a flood insurance policy will be. We’d be glad to discuss your individual needs if you’d like.
Finally, if you’re looking for a new home, find out whether or not the house sits in a flood plain before putting an offer on it. If the home is in an area that is prone to flooding, you will want to consider the cost of flood insurance before buying the home.