On the night of August 15, 2016, South Bend and Mishawaka received record amounts of rain. Most areas saw 8 inches of rain with some localized areas reaching over 10 inches. Naturally, whenever we see mother nature reeking havoc, insurance agents receive many calls about damage. In this case, of course, it was water damage. The first question everyone has in this type of situation is, “Does my policy cover this water damage?” The answer, of course, is “It depends”. Let’s take a look at the different type of water damage claims to see if, and how, each one is covered.
True flooding is defined as an “overflow of inland or tidal waters” or “unusual and rapid accumulation or runoff of surface waters from any source.” This accumulation of surface waters causes damage when it rises enough to enter your home. It can enter through window wells, going over door jambs, or seeping through your foundation. IN ALL OF THESE CASES, THERE IS NO COVERAGE FOR THIS DAMAGE UNDER A HOMEOWNERS INSURANCE POLICY. That’s right, no homeowners insurance policy provides coverage for flooding.
The only policy that provides coverage for this type of damage is a flood insurance policy. For those that are not in a high-risk flooding area, the rates are not that expensive. You can usually get coverage for that for under $500 a year. One thing to keep in mind with flood insurance is that there is a 30 day waiting period, unless you are getting the policy in order to comply with a mortgage company’s requirements when closing on a house. So you can’t wait for a forecast of a huge storm and expect to get flood insurance to cover it. It must be purchased well in advance.
Many times we receive calls where someone will say that their basement flooded and will want to know if there is coverage for that. We take the time with them to determine how their basement “flooded”. Again, if it is a true “flood”, there isn’t coverage under a homeowners policy. However, many times, this “flood” is due to an “accidental discharge or overflow of water”.
This can happen when a pipe breaks, or a hot water heater bursts, or a toilet gets clogged and overflows. There are many issues that can cause water to damage your home. Unfortunately, no damage caused by any of these issues is covered under a “basic” homeowners insurance policy, either. However, most of the homeowners policies that are written are not “basic” homeowners policies.
About 98% of the homeowners policies we write are “special” homeowners policies.
“Special” homeowners provide coverage up to the policy limits for damage that is done due to “accidental discharge or overflow of water”. Don’t assume that your policy provides coverage for this. Make sure before you have a claim that this would be covered.
There is another type of water problem that is not included in the first two, and that is water back-up. Homeowners policies, even those written using the “special” form, exclude water damage that originates from “sewers, drains, or drainage fixtures or a sump pump.” A lot of “flooding” occurs when a sump pump fails or a sewer line gets clogged and water and other “stuff” backs up through that drain. Again, homeowners insurance policies all exclude this type of damage, unless it is specifically endorsed to cover this.
Most policies that we write include at least $5,000 coverage for this type of damage. In some cases we are unable to provide this coverage, but when we are able to, we are usually able to increase the limits, if needed. The cost on this coverage can vary widely by company, but is well worth it if you have a claim involving this type of damage.
As always, you want to review your homeowners insurance policy. After all, it is what protects what is the biggest investment that most people have. If you have any questions as to what is or isn’t covered under your policy, please feel free to give our office a call at 574-855-4837. We work with many different companies in order to make sure that you get the coverage you need at the best possible price.