Understanding Water Damage Coverage: WATER DAMAGE ~ Am I Covered? Understanding which losses are covered and which are not will help you take the necessary precautions to avoid uninsured water losses. The damage from water can be devastating, expensive and always unexpected! The typical Homeowners policy (HO-3, Special Form) covers all risks of direct physical loss to your home including water damage but with significant exclusions and limitations. Generally speaking, your Homeowners policy will pay for sudden and accidental water damage from inside water sources but does not pay for losses caused by water that finds its way into your home from the outside. Where the water originated ultimately determines whether a loss may be covered or not. Answers to other common water claims. Water Damage ~ if my roof leaks is the water damage covered? So, unless excluded or otherwise limited, water damage is a covered loss when caused after an inside water pipe leaks or breaks (like behind a wall or under a sink); or leaks from appliances (like hot water tanks, washing machines, or dishwashers). Your property deductible is deducted from the covered loss. LOSS SETTLEMENT: It is important to note that it is the “damage” to your home from the water loss that is covered; NOT the repair to the actual item that failed. Your Homeowners policy pays for the necessary costs to access (eg. cut open an undamaged wall to access a broken pipe and then pay to repair the wall) and repair the damage caused by the water. But, the broken pipe itself, which failed because of wear and tear, decay, defective materials or methods of construction is not part of the covered loss. The cost to repair the pipe or appliance is your responsibility. Water Damage ~ is flood excluded in a Homeowners policy? The typical Homeowners (HO-3) policy, under SECTION I – PROPERTY EXCLUSIONS, excludes “water damage” caused by: (1) Flood, surface water, waves, tidal water, tsunami, seiche, overflow of a body of water, storm surge or spray from any of these, whether or not driven by wind, including hurricane or similar storm. (2) release of water held by a dam, levee, dike or by a water or flood control device or structure. There are two primary reasons it is necessary to exclude “flood” from a homeowners policy: •Flood losses are often devastating natural disasters that cause more property losses than any individual insurance company can financially withstand. •Most surface water losses can be prevented with proper landscaping of a property that drains water away from structures. If these losses were covered, property owners would not go to the expense of preventative landscaping for the extreme weather events that occur in long cycles – like every ten, twenty or thirty years. Water Damage ~ if water backs-up through my sewer or drain am I covered? Nearly all property forms, including Homeowners policies, exclude or restrict water damage caused by the backup of sewers or drains. The provisions vary from company to company but usually read like in SECTION I – PROPERTY EXCLUSIONS, that water damage is excluded if caused by: Water or water-borne material which backs up through sewers or drains or which overflows or is discharged from a sump, sump pump or related equipment. This exclusion is talking about “overflows” of water from sewers (like out of toilet bowls) and “backups” from drains (like floor drains and sinks). The source of the water or sewage may be “off premises” from a plugged public sewer system or caused by water inside the home that is left on or stuck on which overwhelms a drain system that is plugged or restricted. NOTE: Coverage for sewer or drain water backup can be added by endorsement for a small additional premium. AMERICAN INSURANCE highly recommends that all Homeowner’s policies be endorsed with sewer and drain water backup coverage. These type of claims can be costly to cleanup and repair. Review your policy with your agent to determine what coverage, if any, is currently provided. Contact us. Why do Homeowners and other property forms exclude coverage for sewer or drain water backup? 1. Water backup losses are extremely common but preventable with maintenance and preventative measures by the home owner. Water losses from plugged up toilets and clogged up drains can be prevented or minimized when home owners are observant and promptly repair sticking toilet bowls and clogged, slow running drains. 2. Water systems require periodic maintenance or reinvestment by the home owner. Over time, every water drainage system becomes restricted with rust, deposits and accumulated debris. Drain fields become saturated and tree roots interfere with drainage. Without preventative maintenance, slow running drains won’t handle normal water flow or plug up completely. 3. Off premises sewage backups can be prevented with the installation of drain backflow preventers that are installed on your drain line. Unfortunately, many older homes did not have these preventers installed. 4. During flooding the water table rises and first causes water backup through sewers and drains. Since “flood” is an excluded coverage, the unendorsed Homeowner’s policy has this exclusion. Water Damage ~ if waters leaks through my foundation am I covered? Most property forms, including the typical Homeowners (HO-3) policy, under SECTION I – PROPERTY EXCLUSIONS, exclude “water damage” caused by: Water below the surface of the ground, including that which exerts pressure on, or seeps or leaks through a building, wall, bulkhead, sidewalk, driveway, foundation, swimming pool, hot tub or spa, including their filtration and circulation systems, or other structures. To keep Homeowners policy premiums low and affordable for everyone, coverage is not afforded to losses that can be prevented by sound building practices or as a result of normal wear and tear rather than sudden and accidental events. So, the main reasons it is necessary to exclude “water below the surface” from a Homeowners policy are: 1.Current construction methods require the foundation to allow water to drain away from the home. Older homes may not have followed these methods or due to improper grading, the shifting of the soil or past severe water events, water may find a path to begin collecting underground next to the home. If the intrusion of water through foundations were covered by insurance, then a home owner would have no incentive to correct the problem. Covering these events would give rise to repeated claims after every periodic severe weather season. 2.Over time, every foundation settles, cracks, and eventually deteriorates. This “wear & tear” may require a home owner to excavate around the foundation (and basement) to place drain tiles and patch/re-seal the foundation and basement concrete walls. Again, if this type of water loss was covered then a home owner would have no financial incentive to repair or improve their home.
Posted on: Mon, 22 Dec 2014 15:52:07 +0000
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