Will My Homeowner’s Insurance Cover Damage from a Leak?

The typical homeowner's insurance policy covers the cost of sudden, accidental damages to the structure and contents of a single home. If you have homeowner's insurance, your policy is liable to pay for certain types of damage caused by storms, break-ins and defective equipment. It may also cover fire damage. If you casually glance over your written policy, you'll probably get the impression that its coverages are quite fair.

Unfortunately, your homeowner's insurance policy is probably rife with loopholes. Unless you have a particularly generous policy or have purchased supplemental insurance at some point in the recent past, your policy is unlikely to cover the cost of cleaning up after a leaking water pipe. It's also unlikely to cover the cost of repairing or replacing the offending pipe.

Even if the leaking pipe is decades old, the claims adjuster tasked with investigating the leak is likely to determine that the incident was the result of "poor maintenance practices." In other words, they'll tell you that you should have prevented the leak by repairing or replacing the pipe before its condition became critical. While it may be unreasonable to expect a homeowner to inspect each of the pipes in his or her house on a regular basis, the "maintenance excuse" is standard insurance-industry boilerplate. If your home sustains water damage due to a leak from a worn-down pipe, you may wish to forgo the claims process entirely and take steps to ensure that the problem doesn't happen again.

On the other hand, your homeowner's insurance policy may pay for the cost of a leak that occurs suddenly and without reasonable cause. These sorts of leaks are typically caused by defective pipes or improper third-party maintenance. To ensure that your claim is honored in the proper fashion, be sure to keep all of the maintenance and purchase receipts related to your home's plumbing system. Even if your plumber was working some distance from its source, you may be able to prove that his or her negligence caused the leak.

There are two caveats to this general rule. Your homeowner's insurance policy may not cover the cost of damages that occur due to a leak in your home's external water line. If your yard is flooded, you'll probably have to clean it up on your own. In addition, you should expect your insurance premiums to rise after filing a claim for leak-related damages.

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