Knowing what home insurance does and does not cover you for is important, especially when it comes to major risks like water damage. Water damage is a year round concern that homeowners must be aware of and take proper steps to protect against. One of the best ways to do so is through home insurance. Learn more about home insurance coverage and water damage below.
Homeowners insurance and water damage: what’s covered
The reality is that all insurance policies, including home insurance policies, have several exclusions and limitations that policyholders must be aware of. While sudden or accidental water damage may be covered by home insurance policies, it depends on your coverage level and the circumstances surrounding the damage. For example, an insurance company might investigate your water damage claim to better determine the source of the water. Damage caused by “clean water,” or water that did not enter your home via a sewer or the ground, is typically more likely to be covered than other water sources.
Damage caused by a sewer back up, for example, would only be covered if your policy featured sewer backup coverage. Meanwhile, you could receive compensation for damage caused by a plumbing issue like a burst pipe, though it depends on your coverage. Further, what was damaged in the incident will also determine how and through which type of coverage you are protected by. If it was just your personal property, e.g. clothing, electronics, or furniture, that was affected by water damage, you would likely file a claim under the contents or personal property coverage portion of your policy. However, for instances of more extensive water damage, such as if the structure or foundation of your home were affected, you might need to claim dwelling coverage. If the water damage was so severe that you are forced to temporarily relocate while your home is repaired, loss of use coverage or additional living expenses coverage might come into play:
Flood insurance and water damage
Ultimately, if you are concerned about water damage in your home, basic home insurance may not be adequate. While dwelling or contents coverage may protect you from minor instances of water damage in specific circumstances, standard homeowners insurance is far from comprehensive when it comes to water damage. That is why we recommend adding the following two types of flood insurance to your policy if you want to be fully protected. Either of the following types of coverage can be added as riders or endorsements to many home insurance policies in Canada.
Sewer backup coverage
Sewer backup coverage is designed to protect policyholders from the potential damage caused by a sewer backup, which could include basement flooding. Sewer backups happen when wastewater or sewage backs up in the pipes in your home and ends up coming out of the sinks. Given how extensive such damage can be, this type of flood insurance is vital. While sewer backup coverage is an excellent option if you want to mitigate the financial repercussions of water damage in your home, preventing sewer backup is the ultimate goal. That is why we also recommend installing a sewer backup detection device in your home, which can predict sewer backups before they happen, giving you time to take action. This could be as simple as a $100 sump pump from your local hardware store. Homeowners who install such devices in their homes may also qualify for a home insurance discount.
Overland water coverage
Overland water protection is another type of flood coverage that may be worthwhile to homeowners. It covers another common cause of flooding: ground water. Specifically, when you add overland water coverage to your policy, your insurance company may reimburse you if your house suffers water damage that is caused by a nearby lake/river, overflow, heavy rain, or rapid snow melt. For example, under the overland water coverage section of your policy, you can be compensated in the event of spring flooding (for more tips on preventing spring flooding, contact BrokerLink).
Learn more about how flood damage works by speaking with a BrokerLink property insurance advisor. Any one of our licenced brokers would be happy to review your policy and help you add additional flood insurance coverage. They can also clarify some of the most common flood damage myths.
Homeowners insurance and water damage: what’s not covered
Now that you know when and how homeowners insurance covers you against water damage, let’s dive into the circumstances around when home insurance does not cover you against water damage. There are several water-related incidents that your insurance won’t cover. As mentioned above, property insurance tends to cover policyholders when the water damage that occurs is sudden or accidental. This means that your insurer is unlikely to cover you for water damage that is the opposite of this, e.g. intentional or that occurs gradually over time. A prime example of water damage that occurs gradually is a leak or seepage. We provide a few other examples of water damage that is typically not covered by home insurance policies unless additional coverage like flood insurance has been purchased:
- Sewer backups or water escaping/overflowing from sump pumps, septic tanks, weeping tiles, etc., unless you purchase sewer backup coverage. If you want to learn more about understanding sump pumps, contact BrokerLink.
- Flood, ground water, or rising water tables, unless you purchased overland water coverage.
- Tides and tidal waves.
- Spray, waves, storm surges.
- Damage caused by water-born objects, such as boats or debris.
- Escape of water from an appliance or structure located outside of your home caused by freezing.
- Damage caused by the freezing and thawing of plumbing, heating, sprinklers, air conditioners, or other household appliances in an unheated area of your property.
Meanwhile, a few circumstances in which home insurance will not cover you for water damage include:
Failure to maintain the home
If a policyholder fails to maintain their home and it falls into a state of disrepair, which is what causes or contributes to the water damage, your insurer is unlikely to cover you, even if you have flood insurance in your policy. For instance, if the water damage was caused by a slow leak that you should have repaired but didn’t, and over time, it got worse, leading to the eventual incident, your insurer is likely to deny your claim.
Wear and tear
General wear and tear is not covered by insurance, so if the water damage was caused by the natural deterioration of your home, your insurer likely won’t cover you.
Water damage and mould often go hand in hand, especially if the water damage is gradual. However, unless you purchase additional coverage, a standard homeowners insurance policy is unlikely to cover you for water damage that causes mould. This means that you would be on the hook for the cost of repairing the mould damage or having the mould removed.
A water-related incident that only results in cosmetic damage to your home will probably not be covered by your insurance company.
If your home is undergoing renovations at the time of the water damage, your insurance company may not reimburse you. However, if you purchased home renovation coverage, you could receive some money for the cost of repairs.
Finally, if water damage occurs while your home is vacant for 30 days or more, especially if you failed to notify your insurance provider beforehand, your claim is likely to be denied. Anytime your home is empty for 30 consecutive days or more, you must notify our home insurance company as this increases your risk as a policyholder.
Know what's covered
It is worth noting that, even if your home insurance policy covers water damage, the coverage likely applies to the damage caused by the water rather than the initial cause itself. Insurance is not for home maintenance but for the sudden and unexpected losses that your home occurs. In other words, if the water damage in question was the result of a burst pipe that damages the floor tiles in your bathroom, your insurer could reimburse you for the cost of repairing the damaged tiles but not for the cost of replacing the burst pipes. This is due to the fact that the damage to the pipe would have most likely been caused by wear and tear, deterioration, or poor workmanship, none of which is covered by home insurance.
Tips to prevent water damage in your home
Want tips to protect your home from water damage? We’ve got you covered. Read through the advice below to reduce the odds of water damage in your home:
Replace galvanized pipes with modern pipes
If you live in an old home, we recommend having your home inspected. Why? To identify the type of plumbing system you’re dealing with. Homes constructed before 1950 may contain galvanized pipes, which are known to corrode easily and cause leaks or bursts. If an inspector determines that you have this type of piping in your home, you may want to consider replacing them with new, modern pipes. Once you replace them you can advise your insurance company that you have performed the upgrades as this can mean a reduction in rates. You should also install shut off valves to different parts of your home to mitigate the damage in the event that you do have a leak.
Draft a home inventory checklist
Having a record of the items in your home is important if your home does suffer from water damage. This is referred to as a home inventory checklist, and it is a great tool to have before idling a claim with your insurance provider. By going through this checklist before filing a claim, you can have a better idea of exactly what items in your home were affected by the damage. If you can accompany this list with photos of your items or rooms this will make it easier for the company who is processing your claim.
Store important or valuable belongings on higher levels of your home
Since basements are especially prone to flooding, we recommend proactively storing any important or high-value items in your home on a higher level. For instance, if you have musical instruments, expensive jewellery, vintage wine, or expensive artwork, we suggest keeping them in a safe place on the main or upper floor of your home, preferably somewhere off the floor. Not only will this help keep your precious belongings safe, but it can minimize the size of your insurance claim.
Assess the ground around your home
Knowing which way the ground slopes around your home is important when it comes to water damage. If the ground slopes towards your home, water is more likely to pool next to the foundation after rainfall or snow melt, which can cause damage. If this is the case for your home, you may need to take extra steps to secure the foundation of your home. We also recommend taking additional precautions, such as shovelling snow shortly after it falls and piling it up somewhere farther away from your property to avoid any issues when it melts.
Inspect your roof
It is not uncommon for water to enter the home through a worn roof or one with missing shingles. Therefore, we recommend inspecting your roof regularly or having someone else do it for you. This is especially important before and after the winter, as issues like snow load and ice damming can cause extensive damage to rooftops, which in turn, leads to water damage in your home.
Identify the location of the water shut-off valve in your home and know how to use it
Another tip to prevent water damage in your home is to know where the water shut off valve in your home is located and how to use it. Being able to act quick when you notice water damage is crucial to prevent further damage. For example, if a pipe bursts and starts leaking water everywhere, turning off the source of the water can mitigate the damage. Once you’ve located the water shut off valve in your home, we recommend labelling it and instructing all members of the household on how to use it.
Check for leaks in problem areas
Proactively checking your home for signs of water damage is crucial if you want to catch a minor leak before it turns into a major one. Looking for leaks is relatively easy. We recommend doing it every couple of months and starting with areas of your home that are connected to pipes or water sources, like under sinks, around toilets, or near household appliances like dishwashers, air conditioners, or washing machines. If you notice a leak, shut off the water and call a professional plumber as soon as possible.
Schedule annual HVAC and sump pump maintenance
Preventative maintenance of your HVAC units and any sump pumps in your home is critical to avoid water damage long-term. Many types of HVAC units need water to run, which is why it’s not uncommon for them to be the cause of water damage. If your home has an HVAC unit, like a hot water tank, air conditioner, or sump pump, you should schedule a yearly maintenance appointment with an HVAC professional. They will visit your home, inspect your HVAC units, and assess their condition. If there are any signs of damage or wear and tear, the professional will detect them and can repair them for you before they turn into much larger, more expensive problems. Beyond preventing water damage to your home, regular HVAC maintenance can also increase the lifespan of your HVAC units, which as we all know, are typically quite costly to repair.
Clean your gutters throughout the year
A simple way to avoid water damage in or around your home is by keeping your gutters clean. Dirty gutters, i.e. those that are clogged or blocked by leaves, debris, weeds, twigs, snow, ice, etc., can result in water damage. This is because it prevents the gutters from doing their job, which is to dispel water that collects on your roof down the spout and away from your home. If your gutters are blocked, the water has nowhere to go and it could end up entering your home instead of being ushered away from it. Remember that gutter maintenance is year-round, not just in the spring or fall. If you are not up to the task, we recommend hiring someone to clean your gutters for you.
Maintain an indoor temperature of 10 degrees Celsius year-round
As mentioned above, one of the most common types of water damage that is not covered by home insurance is damage resulting from the freezing and thawing of plumbing, HVAC units, or sprinklers. As you’ve probably heard, frozen pipes can wreak havoc on a home. Luckily, you can avoid the dangers of frozen pipes or other frozen water in your home by maintaining an internal temperature of 10 degrees Celsius year-round. This means, even if you go away on a winter vacation, you should set your thermostat so that your home’s temperature never falls below 10 degrees. This way, warm water will continue to circulate through the pipes in your home, preventing them from freezing. If you are going on a particularly long winter getaway, experts suggest turning off the water supply in your home by locating the water shut off valve and draining the pipes so there is no water flow or standing water in your home’s pipes while you are gone.
Add flood insurance to your homeowners insurance policy
Our next tip to prevent water damage in your home is more about mitigating the financial consequences of water damage, should it occur. This tip is to add flood insurance to your homeowners insurance policy. Insurance companies typically offer multiple types of flood insurance coverage to policyholders, including overland water insurance, sewer backup insurance, and more. Ultimately, if you are worried about a serious incident of water damage, adding this type of protection is highly recommended. A BrokerLink insurance advisor can explain how these types of coverages work and can even help you add them to an existing or new homeowners insurance policy.
Inspect your home before buying
If you are buying a new home, make sure to include a home inspection contingency in your offer. Having your home professionally inspected before the deal is done can save you a lot of trouble down the line. Since water damage is one of the most common and expensive forms of damage, it is important to have a professional evaluate the condition of your future home before you buy it. A professional home inspector will assess the overall age and condition of your home, as well as all important systems, like the plumbing, electrical, and HVAC systems. Their findings will reveal how prone the home is to water damage. From there, you can decide if it is worth purchasing, and if so, this information can inform what types of coverage you add to your homeowner’s insurance policy. If the home inspection reveals that the odds of water damage or plumbing issues are high, then adding flood insurance to your policy will be important.
Get in touch with BrokerLink to learn more about the types of water damage covered by homeowners insurance
Whether this is your first time buying home insurance or you’ve purchased home insurance policies dozens of times in the past, you may not have a firm grasp of water damage coverage. That is why it is so important to work with a licenced and experienced insurance broker. The insurance advisors at BrokerLink all have home insurance expertise, meaning they know everything about how homeowners insurance can protect you against water damage. You can ask them questions about sewer backup coverage, overland water coverage, dwelling coverage, and more to gain a better understanding of the types of water damage that home insurance safeguards against. Of course, as licenced insurance professionals, a BrokerLink advisor can also give you advice on what types of property insurance coverage make sense for your needs and even provide tips on how you can save money on home insurance. Get in touch with BrokerLink today to learn more about our wide array of house insurance services.