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Your homeowners insurance policy should cover any sudden and unexpected water damage due to a plumbing malfunction or broken pipe. However, most home insurance policies exclude damage to your home that occurred gradually, such as a slow, constant leak, as well as damage due to regional flooding. Also, some damage, such as mold, may be excluded from your standard policy depending on the cause. However, additional coverages can be added as optional riders.
Does Homeowners Insurance Cover Water Damage from Leaking Pipes?
Your home insurance policy should cover any sudden and accidental water damage resulting from a plumbing failure, such as a burst pipe or ruptured water heater. There are three different clauses in your homeowners insurance policy that may provide coverage if your house has water damage:
- Dwelling coverage: Your policy's dwelling coverage clause insures the structure of your home, such as its roof, walls and floorboards. If part of your house is damaged by a covered leak, or if you have to remove a part of a wall in order to repair a leak, your dwelling coverage will reimburse you. Dwelling insurance also covers your home's built-in appliances, such as a water heater, if they're damaged.
- Property coverage: Your policy will reimburse you for any personal property, such as clothing, TVs and furniture, that is destroyed when a plumbing malfunction causes damage to your home. However, certain luxury items, such as jewelry, may only be covered up to a $1,000–$2,000 limit, unless you add an optional rider to your policy.
- Additional Living Expenses (ALE) coverage: ALE coverage will reimburse you for hotel, travel and food expenses if you're temporarily displaced from your home.
For example, if water starts unexpectedly pouring out of your washing machine while you aren't home, it could cause your wooden floorboards to buckle. Additionally, the water could leak through the floor and damage the walls or ceiling of the floor below. In this case, an insurance adjuster would come to your home to assess the damage. If the cost to repair or replace your floor, molding and lower-floor ceiling is $3,000, and your home insurance policy includes a $1,000 deductible, your insurance company would pay the remaining $2,000.
What Plumbing Damage is Not Covered by Home Insurance?
While covered water damage does include plumbing malfunctions and burst pipes, it's important to understand that certain situations or types of damage aren't covered. When you initiate a claim for water damage, your homeowners insurance company will send an insurance adjuster to assess the cause and cost of the damage. They will evaluate:
- The location of the pipes or other source of damage
- Whether any of the damage is from an old leak or a new one
- Whether there are any signs of deterioration, such as rust, that should have signaled a future leak
- Whether the leak is simply the result of old age or wear and tear
The adjuster will use these evaluations to determine if you could have reasonably prevented the leak. If they determine that you could have, they may deny coverage.
Lack of Maintenance
Water damage that results from normal wear and tear or a lack of maintenance will not be covered. For example, you might notice a minor leak, but fail to do anything about it for a few weeks since only a small amount of water is leaking. Gradually, that leak could cause a growing bulge in your wall, eventually prompting you to file a claim. Unfortunately, you would have voided your coverage weeks earlier when you decided not to address the issue immediately. Your insurance company would likely claim that you failed to carry out routine maintenance and deny any reimbursement.
Another common claim that many insurers deny is a burst pipe during the winter time. For example, if you go away for the holidays and completely shut off your heat, the temperature may cause your pipes to freeze and subsequently burst. In this scenario, you may be held responsible for paying for the repairs, since you could have prevented the damage yourself.
While a leaking toilet may be covered by your homeowners insurance policy, a flooded or backed up sewage system is not, even though it may overload your plumbing system. Fortunately, most home insurance companies offer sewer or water backup coverage as an affordable rider that you can add to your policy. It's a good idea to add this optional coverage, since sewage damage can be significantly hazardous to your family and destructive to your house and property.
While water damage results from a malfunctioning utility or pipe, flood damage occurs when heavy rains, an overflowing body of water, or snow melt rise to a high enough level to enter your house or overload your plumbing system. While flood damage is excluded from your homeowners insurance policy, you can purchase flood insurance coverage through your insurer if it participates in the National Flood Insurance Policy (NFIP). Evaluate your house's flood risk by viewing the FEMA flood map for your region and consulting your insurance agent. Once you've determined your risk, you can decide if flood insurance is necessary for your home.
In some cases, the difference between flood and water damage is a gray area. Because of this, it's always best to contact your insurance agent as early as possible to determine how you're covered and what steps you should take to minimize the damage.
Most homeowners policies exclude mold damage. However, insurance companies do provide a varying amount of protection against mold damage if it results from a covered leak. You should carefully read your policy's wording to determine your coverage and expect your policy to have a reimbursement limit of between $1,000–$10,000 for mold remediation. While any coverage is good, common mold claims can cost between $15,000 and $30,000. However, like sewage backup, many insurers offer additional coverage in the form of an optional rider. But be aware that if you live in a mold-prone state, such as Florida or parts of California, mold coverage may be substantially more expensive.
In addition to purchasing mold coverage, you should regularly clean, ventilate or dehumidify areas prime for mold growth to prevent it from spreading. These areas include:
- Basements, or any other rooms partially below ground
- Bathrooms, especially if they’re used for showering and don’t have windows
- Laundry rooms
- Cabinetry beneath sinks
- Crawl spaces
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How Can You Tell if You Have a Water Leak?
In many cases, a leak will be obvious and disruptive. Other times, it could go on for days without you noticing, causing an increasing amount of damage until it’s fixed. Use these tips to uncover any leaks you might have in your home:
- Look: Even if the leak is not directly visible, it will often create a sagging spot on your ceiling, a bulge on your wall, or other stains and discoloration. While appearing minor at first, these spots will quickly grow larger and more obvious, and they indicate additional damage you can't see. Responding to the problem as quickly as possible is important, both to minimize the damage and to make sure your insurance company will honor your claim.
- Listen: If you suspect you have a leak, listen when the house is quiet, such as at night. A faint trickling sound or a dripping noise is a telltale sign of a leak.
- Smell: Does a certain room in your house smell musty? This is a sign of moisture and mold growth, both of which point to leaking. Even if the smell is in an area without water pipes, moisture can leak through cracks in your foundation and cause damage. Run a dehumidifier to reduce the mold risk while you seek for the source of the leak.
What to Do if You Have a Leak
If you’ve discovered a leak in your home, you need to act immediately to prevent further damage. The first thing you should do is try to stop flow of water. Some leaks can be solved by properly attaching a dishwasher hose or tightening a loosely attached pipe. In other instances, you may need to shut off your home’s water supply while you investigate the source of the leak.
Before removing any water, document the damage with photographs. This evidence may help you defend your claim with your homeowners insurance provider. Once you’ve documented the damage, follow these steps to remove the water as quickly as possible:
- Elevate any personal property, furniture, and rugs to avoid further damage.
- Open windows to allow air to flow through the room.
- Run an air conditioner or dehumidifier to remove moisture from the air.
- Use a shop vac or sump pump to remove standing water.
- If the leaking has occurred near any electrical wiring, turn off your electricity at the breaker to avoid electrocution.
- Hang any wet rugs or carpet to dry.
Removing the water as quickly as possible will help minimize the ultimate cost of the damage. Once you’ve documented and removed the water, contact your homeowners insurance company to initiate a claim.