Water Damage Clause

DEFINITION of 'Water Damage Clause'

A clause in a property-casualty insurance contract. A water damage clause states that the insured is covered for water damage that occurs for specific reasons, such as frozen pipes or sewer backup. Water damage clauses are therefore usually included in most homeowners and renters' policies.

BREAKING DOWN 'Water Damage Clause'

Water damage can be quite expensive to fix. For this reason, most homeowners and renters are willing to pay a higher price for a policy that includes this coverage. However, water damage clauses usually exclude damage from floods, for which a separate rider or policy must be purchased.

RELATED TERMS
  1. Water Exclusion Clause

    A restriction in a homeowner's or renter's insurance policy that ...
  2. Water Damage Insurance

    A type of protection provided in most homeowners insurance policies ...
  3. Water Damage Legal Liability Insurance

    A policy that provides financial protection to a person or business ...
  4. Contingency Clause

    A contract provision that requires a specific event or action ...
  5. Absolute Exclusion

    An insurance policy clause that eliminates coverage of certain ...
  6. Waiver Of Inventory Clause

    A clause in an insurance policy that says that the insurance ...
Related Articles
  1. Home & Auto

    Life Insurance Clauses Determine Your Coverage

    Understanding these key parts of your policy will help you to ensure that your family will be covered.
  2. Stock Analysis

    Playing Blue Gold's Rise

    While natural resource investing has exploded in recent years, many portfolios have little to no exposure to water. Find out why they call water "blue gold."
  3. Stock Analysis

    Citi Says To Stay Thirsty

    With its supply and demand imbalance in place, water could be one of the best long-term plays for a portfolio. Citigroup’s recent report on water helps underscore that need.
  4. Mutual Funds & ETFs

    Water: The Ultimate Commodity

    Opportunities to invest in this scarce resource are flowing freely - dive in!
  5. Home & Auto

    Intro To Insurance: Property And Casualty Insurance

    By Cathy ParetoProperty and casualty insurance is insurance that protects against property losses to your business, home or car and/or against legal liability that may result from injury or damage ...
  6. Insurance

    Homeowner’s Insurance Gaps to Watch Out For

    Wind and flood damage. Sewer backups. Sinkholes. What coverage are you missing that could cost you a bundle in repairs?
  7. Stock Analysis

    Water Stocks Worth Watching

    The water sector is often overlooked by investors, yet water utilities are involved in a vital industry. We look at some stocks and how they did this year.
  8. Insurance

    Is Renter’s Insurance Worth It?

    Renter’s insurance is so relatively inexpensive that there’s really no reason not to have it. Still, how much does it cost and what does it cover?
  9. Stock Analysis

    Water Utilities Making Waves

    The Dow Jones US Water Utilities Index has quietly rallied 20% rally in a month. This is now a viable sector for investment again.
  10. Insurance

    6 Good Reasons To Get Renter's Insurance

    If you rent, you still need insurance for personal property and if anyone is injured at your place. The good news: It also covers losses when you travel.
RELATED FAQS
  1. Does renters insurance cover water damage?

    Learn how renters insurance provides personal property coverage for items damaged by water only if the water is the result ... Read Answer >>
  2. Does renters insurance cover pet damage?

    Understand the potential snags when it comes to renting a place as a pet owner, and become wiser when it comes to liability ... Read Answer >>
  3. Does renters insurance cover mold?

    Learn how mold damage is covered under a renters insurance policy if the insured makes a good faith effort to remedy the ... Read Answer >>
  4. Does homeowners insurance cover broken pipes?

    Learn how a typical home insurance policy excludes coverage for the broken pipe itself but covers the resulting accidental ... Read Answer >>
  5. What's the difference between renter's insurance and homeowner's insurance?

    Renters insurance and homeowners insurance offer similar benefits for occupants and homeowners, but in different ways and ... Read Answer >>
  6. How does the 80% rule for home insurance work, and how do capital improvements affect ...

    The 80% rule refers to the fact that most insurance companies will not fully cover the cost of damage to a house due to the ... Read Answer >>
Hot Definitions
  1. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  2. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  3. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  4. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  5. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  6. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
Trading Center