Home insurance and water damage: what you need to know
9 minute read Published on Jun 17, 2025 by BrokerLink Communications
When it comes to protecting your home, few risks are as costly—or as confusing—as water damage. Whether you're purchasing home insurance for the first time or reviewing your coverage after spotting a suspicious leak, understanding how your policy handles water-related disasters is crucial. In this guide, we’ll break down everything you need to know about home insurance and water damage: what’s covered, what’s not, and how to safeguard your home before disaster strikes. Let’s dive in.
Does homeowners insurance cover water damage?
Generally speaking, a standard home insurance policy will cover some forms of water damage. However, it ultimately comes down to how the damage was caused. For example, if the water damage was sudden and accidental following heavy rain, melting snow, ice dams, or other severe weather that was out of your control, then you should have no problems claiming water damage under your home insurance policy.
Ultimately, you'll need to review your home insurance policy to determine whether it will cover the type of water damage you're experiencing in your home.
Further, beyond basic water damage that's covered by insurance, you may want to purchase additional coverage for water damage for added peace of mind:
Overland flood insurance coverage
Overland flood water damage coverage is a type of optional home insurance policy that protects your home from water damage caused by overland flooding in your area. Flood damage can be devastating, especially if you live in an area near a natural body of water. If heavy rainfall occurs and a body of water floods your home, normal home insurance will not provide coverage.
But, with overland flood insurance in place, you can have peace of mind that your home and personal belongings are protected against a storm surge, should one occur.
Sewer backup coverage
Another water damage coverage option to think about that is not included in a standard homeowners policy is sewer backup coverage. Sewage backup in your home can cause substantial water damage and health concerns in your home, including mould and mildew growth and typically occurs as a result of heavy rainfall, poor plumbing systems, and overwhelmed municipal sewage systems.
When the sewage has nowhere to go, it can go back into your home through your sinks, bathtubs, and other plumbing fixtures in your basement, leaving a mess behind that is expensive to repair. This is where sewer backup coverage comes into play. With sewer backup home insurance, the cost of repairs will be covered by your insurance provider if a sudden sewer issue occurs and it is particularly important for those living in older homes with basements.
When is water damage not covered by home insurance?
While some forms of water damage in your home are covered by insurance, not all water damage claims are valid. The most common exclusions of water damage include:
Poor maintenance
When you read your policy, you'll notice that most home insurance states that homeowners must maintain their property, otherwise they could invalidate their home insurance. So, if you neglect to conduct proper maintenance on your washing machine, dishwasher, or plumbing system and that leads to a slow leak that causes water damage in your home, you will not receive compensation for the cost of repairs.
Intentional water damage
The water damage coverage portion of your home insurance will also not cover water damage caused by intentional damage. For example, if you purposefully don't prevent damage in your home in an attempt to receive compensation, you'll likely be denied.
Remember, water damage coverage will only cover you if the flooding, burst pipe, extreme weather events, or other perils are sudden or accidental.
What else is covered by home insurance?
Now, beyond water damage, you may be wondering what other forms of damage home insurance covers. While the policies may vary between insurance providers, here is what you can expect with basic home insurance coverage:
Dwelling insurance coverage
Dwelling coverage is intended to protect the structural integrity of your home and other detached private structures on the premises from numerous hazards specified in your policy. Commonly covered risks include:
- Fire and smoke damage
- Theft and vandalism
- Weather damage, including hail and high winds
- Car/aircraft impact
- Explosion
- Falling objects due to extreme weather
Third-party liability
Standard homeowners insurance coverage also includes third-party liability insurance. This element of your policy will protect you if someone is harmed on your premises or property damage occurs.For example, if someone accidentally falls on your property, injuring themselves and shattering their phone, they have the right under the law to sue you for damages.
If liability claims are filed against you, this section of your insurance will pay for medical expenses, funeral expenses, repairs, replacements, legal costs, and other expenses related to settling your personal insurance claim.
Personal belongings insurance
Personal property insurance, often known as personal belongings coverage, protects all of the possessions held in your house against numerous risks that could cause damage or loss.
It's worth noting that when you initially buy property insurance coverage from an insurance provider, they'll want you to create a home inventory. This inventory will include a list of all personal items as well as the cost of each item. With this figure in mind, your home insurer will decide how much coverage you need.
Note that if you have high-value items, standard insurance policies may not be enough to protect them adequately should damage occur. You may be asked by your insurance company to purchase high-value home insurance policies instead.
Additional living expenses
Additional living expenses are the final component of an average home insurance policy. If your home is damaged by a covered risk mentioned in your policy, additional living expenses insurance will cover your living expenses, food, and other expenses incurred while you are unable to live in your home.
What else is not covered by insurance?
While insurance protects against a variety of risks, some situations will not be covered by your insurance company. For example, your insurance company will not cover appliances in your house that have been damaged due to age or a lack of maintenance, because it is your job as a homeowner to maintain your home and its appliances. Your appliances will only receive coverage if the damage occurred as the result of a covered peril listed in your policy.
Another exclusion is pest control, which again is the responsibility of the homeowner. Lastly, whether or not your insurance will cover mould depends on how the mould develops. For example, if the mould was caused by water damage that was sudden and accidental, mould remediation will likely be covered by your provider. However, if the mould developed as a result of a lack of maintenance or intentional damage, then it will not be covered.
How much does home insurance cost?
The average home insurance cost for Canadian homeowners is $1000 to $2000 annually. That said, what you pay specifically for your home insurance policy will depend on many factors, such as where you live, the current condition of your home, the types of insurance policies you choose, your coverage limits, the value of your belongings, your deductible amount, and your previous claims history.
Signs of water damage in your home
Water damage caused by ice dams, pipe bursts, overland water flooding, a leaky roof, rainfall, groundwater flooding, melting snow, natural disasters, and other severe weather conditions can cause homeowners to lose everything they've worked hard for. This is why it's essential that homeowners know what the red flags of water damage are. Take a closer look:
Staining on your walls and ceiling
Look for any discoloration along the walls and ceilings of your home. Slow leaks from your plumbing or washing machine can cause staining in your home.
Mould development
Due to increased moisture in your home, water damage can also lead to mould growth around your pipes, plumbing fixtures, and even your personal belongings.
Bubbling paint
As the water damage progresses and water enters the walls of your house, you will begin to notice your paint bubble and peel away from the wall itself.
Wet spots
Water damage caused by a burst pipe or other problems could also lead to wet spots on your carpet or wood flooring. Check for soggy spots.
How can I prevent water damage in my home?
To prevent home insurance claims for water damage and potentially increase your annual premium the next time you renew your coverage, homeowners must do their best to maintain their property throughout the year adequately. Here are some maintenance tasks to perform in your home:
Install a tankless hot water tank
Update your hot water tank to a tankless model to prevent leaks and more serious water damage in your living space!
Install a backwater valve
To prevent sewer backup, have a licensed plumber install a backwater valve in your home.
Install a sump pump
If possible, you can prevent flooding in your home by installing a sump pump. Sump pumps ensure that groundwater is pushed away from your property rather than flooding your plumbing system.
Properly maintain your plumbing system
Homeowners should aim to book a maintenance appointment with a plumber to clear any clogs and sediment buildup along their pipes at least once a year, especially if they live in an older home.
Clear your gutters and downspouts
Before the fall and winter seasons, make sure to clear your gutters and downspouts so water during heavy rainfall periods can flow away from your property rather than into your home. This is a common cause of foundation damage and water damage that is easily preventable.
Maintain a warm interior to prevent frozen pipes
To prevent home insurance winter claims, ensure that the heating system in your home is properly maintained in the fall by a professional, so you can keep your home at a warm temperature during the winter. A cool interior can lead to frozen and burst pipes, which can lead to substantial water damage in your home.
Maintain your air conditioning
Before the summer season, have an HVAC professional maintain your air conditioning. Unmaintained air conditioners can leak water, leading to water damage on the interior and exterior of your home. For more maintenance advice, check out our holiday protection tips guide!
How to file a water damage claim with your insurance company
If by chance you need to file a claim for water damage in your home, here is how you can navigate your claim process:
1. Review your home coverage
Before contacting your insurance company, we recommend reviewing your policy to confirm that the sudden and accidental water damage in your home is covered by your insurer.
2. Document the water damage
Once you've confirmed that the water damage you experienced at home is covered by your provider, you'll need to document the damage. We suggest taking as many photos and videos of the water damage as it will help your adjuster with your claim.
3. Contact your insurer
Next, give your insurer a call and let the agent know that you would like to file a claim under your policy. At the time, the agent will ask you a series of questions about how the water damage occurred. After, they will provide you with a claim number and send your claim to an adjuster.
4. Speak with an adjuster
A couple of business days following your initial contact with your insurance provider, you'll likely receive an email or letter in the mail that has the contact information of your adjuster listed. Once you have this information, you can go ahead and give your adjuster a call.
During the call, they'll ask for more details about the water damage and ask you to submit the evidence you documented. They may also ask for other records related to your home.
5. Get an estimate for repairs
Now that you've spoken with your adjuster, they may ask to set up an appointment with a contractor to come to your home and inspect the damage. This will give them an estimate of what the repair costs will be and whether any other compensation is required.
6. Get your settlement
Lastly, once the estimate is done, your adjuster will either offer your settlement upfront or allow you to go ahead with the repairs first, once you've paid your deductible. Remember, when your insurance adjuster offers a settlement, you don't have to accept the funds right away if you do not think the amount is fair, relative to the water damage. You can negotiate until you come to an agreement. Once an agreement is made, you'll be compensated for repairs and other losses.
How BrokerLink can help
At BrokerLink, we help homeowners find affordable insurance that protects their interests and finances. With access to numerous policies from some of Canada's top providers, our brokers can help you shop around, bundle home and auto policies for discounts, provide home insurance advice, and customize your insurance to fit your needs and budget. Beyond standard coverage, BrokerLink can also help you acquire the following policies: