The Law Dictionary

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Insurance Claim for Exterior Water Pipe Leak?

Depending upon the type of homeowner's insurance that you own and the location of the damage, your policy may or may not cover the cost of water damage to your home. There are three basic types of American homeowner's insurance policies: HO1, HO2 and HO3. HO1 is the most basic and least expensive type of policy while HO3 is the most generous and costly type of policy. Few HO1 policies cover water damage associated with leaking exterior or interior pipes.

Most HO2 policies provide coverage for damage associated with leaking interior pipes provided that the leak is caused by physical damage or extreme weather. HO2 policies typically don't cover the cost of repairing water damage caused by pipes that leak or break due to normal "wear and tear." HO2 insurance is also unlikely to cover the cost of replacing pipes broken in such a manner.

By contrast, most HO3 policies will cover the cost cleaning up the damage associated with broken interior pipes. Such policies may also cover the cost of replacing these pipes. However, damage that can be traced to negligence or poor maintenance may not be covered. In addition, most HO3 policies exclude damage to exterior pipes from coverage. Providers of homeowner's insurance tend to frown upon paying for any damage that occurs to infrastructure that lies outside of the covered home's foundations.

If you're worried that your homeowner's insurance policy won't cover the extensive costs of cleaning up after an exterior water pipe leak, you may have some options. First, you may be able to get your provider to pay for damage associated with water that seeps back into your house from outdoors. If you have a more generous HO2 or HO3 policy, this outcome will be more likely.

Such water damage is likely to be confined to your home's basement and first floor. You'll be able to secure reimbursement for mold remediation and moisture damage to the walls, floorboards and any exposed electrical wiring. If your basement is furnished, you may also be reimbursed for damage to the furniture, entertainment equipment and accessories that permanently occupy the space. If you store valuable heirlooms, records or electronic equipment in water-damaged areas, you may be compensated for these items as well.

In case your claim is accepted, take careful stock of all damaged items as soon as you discover the problem. In addition, keep all damage-related purchase receipts.


This article contains general legal information but does not constitute professional legal advice for your particular situation. The Law Dictionary is not a law firm, and this page does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.