Homeowner's insurance protects your home from damage, theft, and liability. But there are limitations to that coverage — and it depends on the type of "peril" your policy insures against.
There are eight types of homeowners insurance, but they all fall into one of two categories: named peril or open (all) peril. A named-peril policy covers you for listed events, like a fire, storm, or theft, whereas an open peril policy covers just about anything that might happen unless your policy specifically notes that it's not covered. Open peril provides more coverage than named peril.
Water damage must be as a result of a named peril or covered event. For example, if water damage is from a burst pipe, it could fall under "sudden, accidental, cracking or tearing" or "freezing" or "windstorm" perils. Named peril homeowner's insurance typically covers these events:
Fire or lightning
Windstorm or hail
Weight of ice, snow, or sleet
Accidental discharge or overflow of water or steam
Sudden and accidental tearing, cracking, burning, or bulging
Sudden and accidental damage due to short-circuiting
Water damage that isn't covered by homeowner's insurance
Not all water damage is covered by homeowners insurance. For example, the damage that results from poor maintenance of pipes is not covered. Flood damage is not covered under standard homeowner's insurance and requires separate flood insurance. Standard homeowner's insurance doesn't cover water damage from backup or sewer lines, but it's available as an add-on rider. You need to check with your provider to see if additional coverage is offered for backup and sewer lines.
Flood insurance is an addition to your homeowner’s insurance policy that can cover flood-related damage. A flood is defined as surface water entering the inside of your home structure through existing openings that are above ground level.
Flood insurance specifically excludes water damage from sump pumps, sewer water, broken pipes, rain from an open window, and rain from windstorms. Flood insurance is not required unless you live in a high-risk flood zone. However, the majority of homeowners who experienced flooding in 2020 did not live in flood zones and were not covered under their homeowner’s insurance.
What about mold?
As for mold, if it's a result of water damage from a covered peril — such as a burst pipe, wind, or hail storm — it may be covered under standard homeowner's insurance.
Mold needs time to grow and warm weather, which is why you normally see mold after a hurricane. If you have water damage, Wilson recommends taking damaged drywall or insulation out of the house to dry it out and hopefully avoid mold. If mold is not related to a peril, then most homeowner's insurance companies will deny coverage for mold damage.
How to file an insurance claim for water damage
Here are the four steps for filing a claim for water damage with your homeowner’s insurance company:
Contact insurance carrier. Your carrier may provide a list of contractors.
Ask your carrier for advice to help prevent further damage.
Take pictures or video of the damage and where it is located.
Prevent further damage to property. Focus on a temporary fix so insurance can look and properly access a permanent fix from a professional. Make sure water can run in all faucets. Leaks are usually a sign of a problem, especially in less-used rooms like guest bedrooms.
Renter's insurance covers personal property, not the building, so the process is a bit different from homeowner's insurance. Renters should contact their insurance carrier and property management or landlord. Take pictures of the damage before disposal and clean up.
Prevent further damage by protecting your property — television, laptops, etc. — with plastic. Most renter’s policies have "loss of use" coverage to pay for the cost of being displaced until your home is liveable again.
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Lead Claims Consultant, IICRC Certified
APD Roofing Houston