Many people wonder whether water damage is covered under their homeowners' insurance. The answer to that question all depends on the type of water damage. "Gradual damage" due to water happens over a long period of time. This could be because of a leaky pipe or other causes, such as a crack in a foundation. This type of damage is a common cause for insurance claims.
If you're not sure whether your insurance will cover water damage caused by a leaky 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.
All insurance policies exclude wear and tear, and gradual damage. However, there may be some "exceptions." For example, "resulting" damage may occur as a result of a broken pipe, water tank, or washing machine.
What 'Resulting Damage' Means
"Resulting damage" is different from initial damage. For example, if 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, but the cost of replacing the deteriorated pipe replacement or buying a new appliance would not be covered. This is the type of coverage usually found in most all-perils homeowner's insurance policies.
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 repairing or replacing the broken pipe. However, leaky pipes are different from broken pipes that could potentially flood the entire home. This type of flood is covered under an all-perils policy. A flood from rising water would require separate flood insurance coverage.
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.
After a pipe bursts, homeowners insurance covers damage occurring to the carpet, 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.
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 the water off quickly.
Make sure you understand all the coverages on your policy and have a good understanding of the exclusions, as well as your responsibilities as a homeowner. In addition, do regular maintenance of your home every spring and fall to avoid surprises. Small repairs regularly will avoid large expenses. Also, don't skimp on insurance. Make sure you purchase the best insurance for your needs and inquire about extra coverages that you may need.
What to Do If Your Claim Is Denied
If you were denied coverage and think your coverage 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.