Cold weather has caused a pipe to burst in your home, and water has ruined your wood floors. Will your homeowners insurance cover it? Whether water damage is covered under homeowners' insurance depends largely on the nature of the aquatic mishap. If the damage occurs as a result of something sudden or unforeseen—like a broken pipe, a leaking air conditioning unit, a malfunctioning washing machine—the policy typically covers it.
However, if the cause is "gradual damage" that happens over a long period of time—due to a leaky pipe, for example, or a crack in your home's foundation—the insurance company may balk.
All insurance policies exclude problems due to wear and tear as well as gradual damage. However, there may be some exceptions. "Resulting damage," for example, may occur as a result of a cracked water tank, an exploding dishwasher, or, yes, a broken pipe.
- Homeowners insurance generally covers damage due to broken pipes if their collapse is sudden and unforeseen.
- Water damage that occurs gradually due to a leaky or rusty pipe, however, is generally not covered.
- Homeowners insurance covers damage caused by broken pipes, but not the repair or replacement of the pipes themselves.
- If you feel your claim has been unjustly denied, consider getting a second opinion by a licensed professional or a consumer advocacy organization that is familiar with insurance in your region.
How Insurance Views Pipes
Most insurance companies would consider a home's plumbing to be under normal homeowner maintenance. The property owner is responsible for making sure pipes don't freeze, are kept unclogged and screwed tight, and generally maintained—and to be on the lookout for mold, mildew, or other signs of water damage that suggest a small crack, hairline fracture, or leak somewhere. (It's only going to get worse over time.)
Damage that develops gradually due to a slowly leaking, rusting, or deteriorating pipe is generally not covered. However, leaky pipes are different from broken pipes or burst pipes. These gushers could potentially flood the entire home. So the damage and destruction they bring are covered, usually under the all-perils section of your homeowners insurance policy.
If you live in a northern climate and your broken pipe is a result of freezing due to a lack of heat in the home, an insurance company could cite your negligence and deny your claim. Broken pipes must happen suddenly and by accident and shouldn't have been easily preventable. If you ignore a leaking pipe, and it subsequently bursts, the insurance company can see evidence of a long-term leak and deny the claim.
Homeowners insurance only covers floods due to internal causes. A separate flood insurance policy protects havoc wrought by external or natural forces, like rising waters or overflowing sewers.
What Is Covered
Some policies distinguish between "resulting damage" and initial damage. If, for example, water damage resulting from a broken pipe or appliance is listed in your insurance policy wording as covered, then you may be compensated for some or all of the damages caused, even if they didn't occur right away.
After a pipe bursts, homeowners insurance covers damage occurring to the carpet or rugs, the floor, drywall, paint, and so on. Any service needed to clean up the water, dry out the home, and possibly prevent mold would also be included in this coverage. Ironically, the cost of repairing the busted pipe or of replacing the broken appliance—the cause of the problem—is not covered.
How to Avoid Having a Water Damage Claim Denied
It's important to have your plumbing inspected by a licensed professional on a regular basis, and maintain records of repairs and the professionals you have hired over the years to do inspections and maintenance. These records could become very important in the event of a claim.
Different portions of your home's plumbing will have various life spans. Replace pipes that are beyond their intended service lives. In northern climates, be sure to leave your home's heat on, even if it is set to low, during the winter, especially if you are leaving for an extended period of time. Every home, regardless of climate, should have a water shutoff valve. Know where this valve is located, and make sure it is operable in case you need to turn off the water quickly.
Make sure you understand all the coverages on your policy and have a good grasp of the exclusions, as well as your responsibilities as a homeowner. In addition, perform regular maintenance of your home every spring and fall to avoid surprises. Regular small repairs can help you avoid large expenses. Also, don't skimp on insurance. Make sure you purchase the best insurance for your needs and belongings and inquire about extra coverage that you may require.
What to Do If Your Claim Is Denied
If you were denied coverage that you think should have applied to the damage caused by a leaky pipe, you might consider getting a second opinion by a licensed professional or consumer advocacy organization that is familiar with insurance in your region.
Your insurance company may also have an ombudsman that can help review your file. You can also contact your state insurance commissioner for guidance or to file a complaint.
The Bottom Line
If you're not sure whether your insurance will cover water damage caused by a leaky or busted water pipe, it's important to review the exact wording of your homeowners' policy with your insurance advisor, agent, or broker. You will have to review the exclusions of your policy as well as the type of coverage you have.