Are You Covered for a Rainy Day: Home Insurance and water losses
FINALLY! Looks like we are almost out of the thick of winter, and spring is near. What a miserable past, almost six months! I’m so excited! You know who is even more excited, though? The water restoration companies that are always popping by our office to try and get in with us and our customers. They know that the rainy season is on deck, and water damage is big business. Failed sump pumps, possibly still frozen pipes, and flood is imminent. They’re grinding their teeth and licking their lips. They know a little water in your home means THOUSANDS, not hundreds of dollars for them. However, this may not a big deal for you, if you have the right insurance.
Let me first define a few of the buckets water losses fall into:
Water damage from burst pipes: Water in pipes freeze, expand the metal, break the pipe, water flows freely all over the place. The vast majority of home insurance policies cover the resulting damage from the water, but not the pipes themselves.
Toilet or sink overflows: This is probably yours or your child’s fault, let’s be honest. Water damage again is covered by the vast majority of home policies.
Water backup from a drain or sump pump: This is where you need to start being careful with your insurance. This is not covered, unless you purchased an endorsement to your policy for “Water Backup”, “Water Backup from Sump-pump or Drain”, etc. coverage. Typically sold in increments of $5,000. Most people have $5,000-$30,000 in coverage on their policy for this if they have a basement, but in Kansas, and many states, you have a duty to read your policy. Check it out.
Broken water main outside the home: Historically, not covered with no option to cover. However, recently, utility companies have been offering a warranty available to purchase to cover this, and even MORE recently, some home insurance companies have been offering an endorsement. If yours isn’t one of them, give us a shout.
Water seeping through the basement walls: If water is doing this because of damage or cracks in the foundation, this is not covered. Insurance covers sudden and accidental losses, not slow deterioration or maintenance issues. Similar to the way auto insurance covers a crash, or hail damage, but doesn’t cover mechanical issues.
Flood: Defined as two acres or more of normally dry land inundated by water or mudflow- Your home insurance policy does not, and can not cover this. Period. A separate flood insurance policy is required for this loss to be covered. Flood insurance is a difficult thing to insure, as the likelihood of it happening is not the same for most geographical areas. Insurance companies are unable to hedge the risk of a catastrophic flood happening in one neighborhood by selling policies in another neighborhood far away. Flood is most common in flood zones, meaning that if you are in a flood zone, it will happen to you often, and if you are not, it probably won’t happen at all (not that it can’t). Because of this, flood insurance is regulated by the National Flood Insurance Program- NFIP, run by FEMA. You do not have to contact FEMA, there’s a decent chance that your home insurance company also sells flood insurance, but all of the wording, and coverages will be the same no matter where you buy it. We recommend that you do not blow off the idea of buying flood insurance simply because you are not in a flood zone. It is usually only a few hundred dollars per year if you are not in a flood zone, it can still happen to you, and you’re risking your whole house by foregoing it.
Don’t be victim. Know what your policy covers, think about your lifestyle and the risks you might face, and buy the right insurance. If you need a new price, agent, or opinion, give the team at Aspire a call!