Water and Homeowners Insurance

by Susanne Romo

When most people think of home insurance and claims, fire or burglary is usually the first thing that concerns people.  But what might surprise you is that neither of those claims is the most common.  Water is. And your homeowner’s policy may or not cover the damage.  The bottom line your claims adjuster will need to know is —- where did the water come from? Did it come from a sudden and unexpected burst of a pipe? Old corroded pipes finally gave up? The sewer backed up? Rain leaked in from the roof? A flood?

Many times water is simply not covered because it is a maintenance issue, not a catastrophic one. Homeowners insurance is meant to protect you from events outside of your control. All types of insurance are based on risk. The dictionary defines risk as “Uncertainty arising from the possible occurrence of given events” The key word here is uncertainty and lack of control. So, if it comes down to a maintenance issue, there is not the key factor necessary to create coverage—- uncertainty and a lack of control.

Every winter when the storms come, I see claims submitted for ceiling damage. Too many times this is not covered because it is a maintenance issue.  The roof is older, there’s a leak, and it causes damage to your ceilings.  Is this covered?  Generally this is not covered, as it is a maintenance issue.

People generally don’t think of the pipes in their house until they break and water is everywhere. If you have older pipes that have corroded and finally worn out and water is everywhere, is there coverage?  Again, this is a maintenance issue, and probably will not be covered.

Another source of water damage is from household appliances, heating or air conditioning systems, or plumbing/heating systems.  Did the pipe burst or the water heater leak? Did the ice maker line break? Once the claims representative determines that there is policy coverage, it usually covers the damagescaused by the water but does not pay to repair the damaged or broken water line or appliance.

Another and truly the most devastating water claim is from flooding. Flooding is also probably the most misunderstood of the types of water claims. The reason for the misunderstanding is that “flood” is not normally covered by most insurance policies. In California, flood insurance is a separate policy, just like earthquake. Flood coverage rates depend on what is called a ‘flood zone’.  If you are not in a high-risk zone, flood insurance can be very affordable.  And you would know if you are in a high-risk flood zone, as your lender would have required you to purchase flood insurance.

Unfortunately when it comes to water claims, this is an issue that causes consumers to get angry andsay “I have paid years of premiums, why isn’t this covered?” Don’t get angry.  Learn about your policy.  Read one of the most important parts of the entire policy— the exclusions page.  Not all policies are alike.  Even in my own agency we have several different types of homeowner’s insurance policies; from the most basic to more coverage-loaded policies. You need to sit down with your agent and talk about what you are trying to cover.  A landlord needs different coverage than a homeowner. A condo policy is very different from a renter’s policy.

When you are “shopping rate” be careful you are not inadvertently shopping ‘coverage’.  All policies are not created equal.  If you are saving a considerable amount of money, hesitate, and take a side-by-side comparison with the two policies.  What you are ‘saving’ in premium may cost you in ‘coverage’ over the long haul. And if your agent just gave you a ‘rate’ without learning something about you and what you are trying to protect and what is most important to you….you may need to seek out another agent.