Does My Homeowner's Insurance Cover Water Damage?

WrittenJames Hirbyand Fact Checked by The Law Dictionary Staff  

Your homeowner's insurance policy is likely to cover certain types of water damage to the interior of your home. Exactly what it covers will depend upon several factors. First, the type and cost of the homeowner's policy that you carry will determine its deductible as well as any limits to payouts arising from specific claims. There are three basic kinds of homeowner's insurance policies: HO1, HO2 and HO3.

These are differentiated mainly by their premium costs and coverage restrictions. HO1 policies demand lower premium payments but carry high deductibles and may not cover certain types of damage to covered homes. HO2 policies are intermediate products that tend to have moderate deductibles and cover most types of damage. HO3 policies are the most generous and expensive form of homeowner's insurance. These policies have limited deductibles and carry plenty of perks that make them well worth their added cost.

There are some types of water damage that homeowner's insurance won't cover. Damage caused by natural flooding from an exterior source must be covered under a distinct flood insurance policy. Homes in dry climates or elevated areas away from natural sources of water may not require flood insurance policies. By contrast, homes in low-lying areas along rivers, lakes or oceans may require flood insurance.

The market for flood insurance is highly localized: In flood-prone areas where basements flood regularly, flood insurance can be ruinously expensive. This is also true in regions that regularly experience hurricanes and severe thunderstorms. In Florida, the flood insurance market is highly regulated to reduce out-of-pocket costs for the state's homeowners.

If your house sustains water damage during a weather event, a generous homeowner's insurance policy may cover your repair costs in certain circumstances. You'll probably need to show your claims adjuster that the damage occurred due to a defect in your home's construction. This line of reasoning might work to explain water seepage through a poorly-sealed window or weak point in the building's structure. It is less likely to be an adequate explanation for water that clearly entered the home through an open window or door.

Homeowner's insurance is more likely to cover water damage associated with faulty plumbing or appliances. Of course, this outcome isn't guaranteed. Before your provider will agree to pay your claim, you'll need to prove that the leak or flood was caused by poorly-manufactured water-bearing equipment or shoddy repair work on an existing water line.

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