Does Homeowners Insurance Cover Water Damage?

Water damage is a peril that a standard homeowners insurance policy may cover under dwelling coverage. However, the cause should be a covered peril.

Some perils, like sewer backup or hidden water damage, are usually only covered through endorsements.

Don’t confuse flood as part of water damage because it is almost never covered by homeowners insurance unless it was caused by a covered peril. To be fully protected from flood water damage, you must have flood insurance or difference in condition (DIC) insurance. These are separate policies, and very few insurers offer them.

A standard homeowners insurance policy covers water damage under dwelling coverage or by endorsement under sewer backup or hidden water damage coverage.

Most standard homeowners insurance policies cover the costs associated with water damage if it happens suddenly or accidentally from a source inside your home, such as a broken or frozen pipe. Your policy does not cover water damage caused by a source outside your home, like in the case of a flood. Below are some instances when homeowners insurance covers water damage.

A standard homeowners insurance policy covers the repairs due to water damage as long as the cause is sudden and accidental and the source is within your home.

For example, if an upstairs pipe suddenly bursts, soaking the ceiling below and damaging your floor, the policy’s dwelling coverage shoulders the expenses of repairing your damaged ceiling and flooring.

Also, any damage to your personal belongings resulting in the need to repair or replace them is covered by the personal property coverage in your policy.

If the water damage causes your home to be unlivable, the additional living expenses coverage in your policy pays the cost of your temporary relocation.

Homeowners insurance does not cover all types of water damage — homeowners insurance will not pay for damages arising from poor maintenance and negligence.

Below are some scenarios when a homeowners insurance policy won’t cover water damage.

Unresolved Maintenance Issues: Homeowners insurance will not cover water damage if you cause the peril yourself, either due to poor maintenance or negligence. For example, a faulty plumbing fixture, such as a leaking sink or unrepaired pipe, will not be covered by your policy.

Source of the Water Damage: A standard policy does not cover the repair or replacement of the source of the water damage – for example, a broken dishwasher or washing machine that causes water damage to your floor. But, you may add an endorsement to your policy that covers the appliance.

Water Backup From an Outside Sewer or Drain: A standard homeowners insurance policy typically excludes damage caused by sources outside your home. For example, if water backs up to your property due to a faulty outside sewer or drain, your policy does not pay for repairs. It is best to buy sewer or water backup add-on coverages to protect your home from this peril.

Flood: A homeowners policy does not cover flood damage. We highly recommend getting flood insurance if you live in an area that is flood-prone. Most insurers provide flood insurance coverage through the National Flood Insurance Program (NFIP), so it is best to check if your insurer carries this option.

Having a homeowners insurance policy protects you from the financial burden of having to deal with the cost of repairs when sudden and accidental water damage occurs in your home.

We advise you to regularly check and inspect your home’s indoor plumbing system and immediately repair any leaks or damages since lack of maintenance that causes water damage is not covered by homeowners insurance.

MoneyGeek lists below some practical advice to safeguard your home and personal belongings from water damage.

Most leading insurance carriers, such as State Farm, and regional providers, like Hippo, provide homeowners insurance. MoneyGeek strongly advises comparing homeowners insurance quotes to identify which insurer is best suited to your needs.

On average, the cost of homeowners insurance is $175 per month. But this rate may vary depending on the provider, property value and the value of belongings.

Use MoneyGeek’s personal property calculator below to get an estimate of how much you could pay for the coverage you need.