Most water damage losses are covered by home owners insurance policies. But there are exclusions. The best time to check to see what is and is not covered by your insurance policy is before you have a problem. You should get your policy out and read it when you receive it. Then if you have a question, you should ask the agent you purchased it from for an explanation. The majority of home owner policies cover water damage if it is from an inside source. Many policies exclude ‘rising water’ or flooding, a separate flood insurance policy is needed to cover this type of loss. Some policies exclude water coming from a failure from a sump pump, although you may be able to purchase a special coverage ‘rider’ that will pay for this situation. Some policies do not pay for a sewer back up that is caused by an obstruction in the pipe outside of the home or if the sewer backs up due to a problem with the city or other sanitary service provider. See your policy for exclusions of this type.
Almost all residential insurance policies have what is called a deductible or co-pay. This is where you will pay a preset amount of money to correct or repair the covered loss before the insurance company will begin to pay. This amount may be as little as $100, but can be $250, $500, or even $1,000 or more. The vast majority of policies, however, are from $250 to $500 in the deductible amount. And although most policies will cover the damage caused by unwanted water that is released in your home, they rarely cover the repair of the item that caused it.
It is also important to know that most insurance policies have a clause in them that requires the owner of the policy to use their best efforts to ‘preserve and protect the structure and contents from further damage’. This means that the insurance company wants you to do what you reasonably can to keep the damage from spreading or getting worse. This would include attempting to shut off the water if that is possible, removing what items that you can to prevent them from being ruined, and of course, calling a professional company, if it is prudent to do so. Reputable, knowledgeable water damage restoration firms are not insurance representatives and cannot interpret your policy, but they can help you to meet your obligation to ‘preserve and protect’ your home and contents from further damage. If the job qualifies, they will work with your insurance company on payment terms. You, of course, will have to pay the deductible when the technician arrives and sign some paper work that authorizes the restoration company to do the emergency work.
Remember, your insurance company wants and expects you to take reasonable efforts to keep the situation from getting worse, even if you can’t get a hold of someone from your insurance firm. This includes arranging for a qualified firm that specializes in water damage restoration to come out and assist you in your emergency protection efforts.