Water damage would seem quite simple on the surface, but it can get complicated in a hurry if you have a claim. Determining where the water is coming from and what caused it to happen can be extraordinarily difficult. Water claims are becoming more frequent, as the water does not have time to drain before the rain starts again, leading to sewers backing up, flooding and the water tables rising rapidly. It is important for you to understand what is covered, and how to make sure you are not left footing the bill after your basement has 3 feet of water in it.
As a broker, we see the world of insurance change daily. The biggest changes in the past few years have occurred with water damage as clients have demanded coverage for perils which have long been excluded. Your typical home insurance policy covers the burst pipe, overfilled bathtubs, leaking hot water tanks, rain coming in after a tree destroyed your roof and much more. However, there are three glaring exclusions to the common homeowner’s policy:
2) Overland Water
3) Ground Water
These exclusions can be added back onto your policy at your request, so it is best to ask your broker.
What specifically are these three things?
1) Sewer-Backup – This happens when sewage backs up from your toilet/sink/shower into your house. It applies to both sewers and septic systems as both are susceptible to backing up. They often affect the basement, as those toilets are closest to the sewer, however it has been known to reach higher levels. Sewer backup claims are often in the tens of thousands of dollars, particularly when the basement is finished.
2) Overland Water – More commonly known as flood, this peril is water that accumulates on the ground and comes over your foundation into your home. This is an important distinction because it is often difficult to determine where the water is coming from, and if you have purchased Overland Water Coverage claims as the result of water coming through the foundation are not covered. Typically foundations, including the walls and floors, will not leak if there are no cracks in them. Most insurance companies consider cracked foundations a maintenance issue that the homeowner should have fixed before it started leaking – however there is coverage for this under the next peril.
3) Ground Water – the last piece of the water puzzle is Ground Water. This peril is when water comes through your foundation into your home, including the floor and walls. We are seeing more of this type of claim, as this summer has been very wet so far, and the water tables have not had time to drain properly before the next downpour.
As a homeowner, what should I do?
The first thing is you should check with your insurance company to see what specifically is covered under your policy. Water claims can be tens of thousands of dollars, which very few people have sitting in the bank. All companies rate coverage for these perils differently, so you should ask your broker if the coverage is available with your current company, or with a different company.
The other thing you have to be aware of is a separate deductible for water damage claims. Typically water claim deductibles are $2,000 compared to the rest of your policy which is subject to a $500 or $1,000 deductible.
The cost seems very high, is there anything I can do to lower it?
Most insurance companies offer a discount for installing devices that help avoid water damage. Sump pumps, back-flow valves and alarms can help alleviate some of the additional cost. Water damage would seem quite simple on the surface, but it can get complicated in a hurry if you have a claim. Determining where the water is coming from and what caused it to happen can be extremely difficult. We are seeing more water claims everyday, as the water does not have time to drain before the rain starts again, leading to sewers backing up, flooding and the water tables rising rapidly. It is important for you to understand what is covered, and how to make sure you are not left footing the bill after your basement has 3 feet of water in it.
Please ask us to help you make the right choice, as every situation is different. We will go over all of your options to help you choose the one that makes the most sense for you. Call us today 905-623-4406 and let us help you.