When something happens to your home, one of the first things most people do is contact their insurance company. Homeowners Insurance is there for damage that occurs to your home and it’s only reasonable to hope that your insurance policy will cover the flooding damage currently affecting your basement.
But insurance policies are complex and, unfortunately, don’t cover everything. Making this all the more confusing, basement flooding and seepage coverage depends largely on where the water came from and how it entered your home. In fact, of all the questions we get asked, this is by far the most common.
So what impacts basement flooding coverage and how does it work? Here’s what you need to know:
Flooding isn't always "flooding"
When your basement fills with water, many homeowners will understandably refer to this as “flooding”, but that isn’t always accurate. Flooding is a specific cause of damage, not its effect. So, for example, rising waters from rivers, creeks, or streams that may enter your home would be considered damage from flooding. Groundwater entering through your foundation due to a high water table or as a result of a recent rain, water that backs up through your drains or sewer lines, or Water Damage caused by a broken pipe, are not “flooding”.
And it’s important that you accurately describe the damages and the cause to your insurance company, because incorrectly using terms like “flooding” can lead to confusion and even improper denials!
What if it IS Flooding?
If the water that filled your basement was the result of flooding from a nearby river, creek, or stream, the resultant damage would generally not be covered by your homeowners insurance policy. A separate Flood Insurance Policy would be required. Most homes in known flood plains are required to maintain flood insurance by their mortgage holder. Please keep in mind however that it is not unheard of for areas outside of known flood plains to be impacted when flooding does occur as the path of water can be unpredictable.
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What if it's Groundwater?
Groundwater or seepage is water that enters your home through the foundation, following a path along or through soil. This can be the result of a high water table or a sudden event caused by heavy rains or changes to nearby landscaping or drainage.
Unfortunately, groundwater and the property damage that results from it are fairly standard exclusions to most home insurance policies. These are issues that are generally viewed as a maintenance issue that may require Basement Waterproofing or changes to your landscaping, gutter system, or drainage to resolve.
However, coverage does depend largely on where the water is coming from as well as the circumstances that led to the water intrusion. If the water backed up through a drain rather than seeping through the foundation, or the water intrusion occurred as a result of the failure of your sump pump, some coverage may still be available under your insurance policy (Please see below).
What if it backed up through the drain?
Many insurance companies offer an “add-on” or endorsement to their policies that will extend limited coverage to homeowners for damage caused by water backing up through a drain. This is why it’s so important to know what occurred and to clearly and accurately describe the damage and its cause to your insurance company.
We always recommend contacting your insurance agent to review your policy and determine if you have the necessary backup endorsement and if this damage is covered. Generally this endorsement will have a separate limit for backup coverage, most commonly $ 5,000 or $ 10,000, which can help significantly in the event that you experience damage to your home as a result of water backup. For more information, please see How much backup coverage do you need?
What if the sump pump failed?
Generally covered under the Backup Coverage Endorsement, equipment malfunction coverage will assist you in cases where your sump pump failed, allowing water damage to occur that normally wouldn’t have happened. Just as with the Backup Coverage, this will have its own coverage limit defined by the endorsement, most commonly $ 5,000 or $ 10,000.
Due to the potential for issues as a result of drain backup or equipment malfunction, we strongly recommend homeowners have this endorsement on their policies and recommend speaking to your insurance agent to ensure you’re covered in the event these issues occur.
What if the water was caused by a municipal water line?
Municipal water lines carry a LOT of water, so an issue like a break or blockage can quickly impact entire streets or neighborhoods. Fortunately, many municipalities will take responsibility for damage caused by issues with their water lines and / or have insurance that will assist homeowners impacted.
However, this process does often take some time, often requiring homeowners to pay for the necessary water damage mitigation and drying upfront in order to prevent further damage. In cases where basement flooding was caused by a municipal line, we always recommend keeping detailed records, photos, and billings so that you can submit those to the municipality or their insurance company should they offer to take responsibility for the damage.
We hope this helped answer some common questions about Basement Flooding and what is and is not covered under standard homeowners insurance policies. Should you have any additional questions, or need assistance with a water issue in your basement, please don’t hesitate to Contact Our Offices! We’re happy to help.
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