When we think of home insurance claims, we often think of risks like fire, break-ins, or even falling trees. Accidental spills and overflows may also come to mind, and a standard home insurance policy covers these common risks. However, many standard home insurance policies do not automatically cover water backup, and the potential for losses can reach into the tens of thousands of dollars or more.
Generally speaking, the coverage for your home ends at the walls, although standard policies also offer coverage for other structures like fences or detached garages. What this means, though, is that pipes leaving your home and other utilities may not be covered by your policy. Water backup, in particular, can be a huge risk because the cost of remediation and repair can quickly drain savings or even force the use of credit. In some extreme cases, the cost of repairs and remediation exceed the value of the homeowner’s equity and the industry has seen cases where families lost their homes due to water backup damage.
Fortunately, many insurers make this coverage available as an affordable add-on. In most cases, you can adjust the amount of coverage you choose. For example, a lower limit might provide $10,000 of coverage. A lower coverage limit could work if you were willing to assume some of the risk yourself. Water backup claims often exceed this amount, so coverage limits of $25,000 or higher can provide better protection.
Water is unique in its ability to continue causing damage well after the damaging event has passed. Proper remediation and repair for water backup damage or sump pump failure requires specialized equipment and may even force your family away from your home temporarily. With the right coverage, you will not have to cover the cost of repair and remediation yourself.
Just reach out to your broker to learn more about your options for water backup coverage and other essential ways to protect your home.
