My sister and her husband were like any other newlyweds. They wanted to settle down and start their lives together. To them, that meant buying their first home. In their search, they found an ideal three bedroom, two bathroom home in a metropolitan area near family and friends. It was well within their budget, had a great backyard, and they imagined themselves raising children and growing old in the home. Thankfully, they also bought a home insurance policy along with water damage insurance.
As with any house that is 60 years old, it wasn’t perfect. Some rooms needed new paint, the trees in the backyard needed to be trimmed back to prevent large branches from falling on the home, and the downstairs bathroom needed renovating. However, these were small projects that they were willing to take on in order to purchase their dream home.
Within their first year of home ownership, they quickly learned to expect the unexpected. One sunny fall day, not three months after moving in, my sister was conducting her usual Saturday morning routine. She threw some clothes in the washing machine and went upstairs to vacuum. Unfortunately, she accidentally left a small towel in the washbasin next to the machine. This clogged the drain, and led to a sink full of water, which soon overflowed. By the time she realized what had happened, the damage had been done. The lower few inches of drywall linking the laundry room to the third bedroom and family room were completely soaked, as was the carpet in both rooms.
She and her husband took the proper steps to dealing with the nightmare that suddenly sprung before them. They didn’t have flood insurance because the location of their house didn’t warrant coverage. However, this wasn’t a flood caused by weather anyway. So, they contacted their local insurance agent and had a contractor visit to assess the damage. The estimated costs were $3,000. They submitted the cost of the work to their agent who then approved the bill. The only amount they had to pay out of pocket was their $ 1,000 deductible.
After about a month, my sister and brother-in-law had their home in perfect working order. That is, until that next spring. Again, another unfortunate accident led to more headaches. Without noticing, the downstairs toilet continued to run all night long. The sewer pipelines connecting from the toilet to the main line along the street were clogged, and after running for several hours, the water to back up and eventually come out of the toilet and onto the floor. This time, the damage was multiplied. The few inches of water they had experienced six months prior was now a half-foot high and throughout their entire basement. All of the carpet and more drywall needed replacing. If they were inexperienced homeowners when they bought their house, they were professionals now.
As with the prior incident, they contacted their independent insurance agent, who helped them take the necessary steps to fixing their basement.
Mistakes or accidents like these don’t have to cause financial ruin. You simply need to make sure you have the proper insurance protection.
The Dangers of Water Damage
Water can be one of the most destructive elements to your home. It can cause mold, structural damage, destroy floors and walls, and other unpleasant flaws to your home.
According to Water Damage Information, “Water damage describes a large number of possible losses caused by water intruding where it will enable attack of a material or system by destructive processes such as rotting of wood, growth, rusting of steel, de-laminating of materials such as plywood , and many, many others.
The damage may be imperceptibly slow and minor such as water spots that could eventually mar a surface, or it may be instantaneous and catastrophic such as flooding. However fast it occurs, water damage is a very major contributor to loss of property.”
Two Types of Water Damage Insurance
There are two types of insurance policies that deal with water damage. The first, flood damage, is covered in another article on enhancedinsurance.com. This article will focus solely on the second type, which is part of your homeowners insurance policy. Homeowners insurance does not cover damage incurred during flooding, but covers other types of water damage to your home.
It is important to understand the differences between flood and other types of water damage. Flooding involves water external to your house. Rising water levels caused by heavy rains, mudslides, hurricanes, and overflowing rivers and lakes may seep into your home causing damage. Water damage not caused by flooding begins with excess water within the home.
The important difference between flood insurance and coverage under your homeowners insurance is that it considers all damage caused by water before the water comes in contact with the ground. This includes:
Heavy rain or hail entering your home through a damaged roof or window
Burst pipe spewing water in your home
Losses due to theft, fire, or explosion as a result of water damage
There are some important caveats to knowing whether or not you are covered. Read through the following accident categories in order to understand what is/isn’t covered:
Pipes: if the pipes to your home freeze and then burst, you will probably be covered under your insurance. However, your insurance company expects you be a responsible homeowner and to take the necessary steps to prevent this from ever happening. You need to make sure that you drain and cover your pipes while maintaining a house temperature of at least ten degrees above zero.
Appliances: Washing machines, dishwashers, and water heaters can, and often do, fail. You may be denied reimbursement for your water damage claim if you cannot prove that your appliances were properly maintained. Additionally, the insurance company will most likely cover areas of the home that were damaged by the water, but not the broken appliances themselves.
Groundwater: If water is seeping into your home through the ground, this is not going to be covered through your homeowner’s insurance. Water damage insurance protects against sudden and unexpected incidents, and this is not considered to be in that category.
Weather: If you experience a heavy rainstorm, and water seeps in under your roof, the insurance will cover anything that has been damaged. However, it will not pay for the cost of a new roof as this is considered to be part of regular home maintenance. However, if an unexpected accident occurs, like a tree falling through your roof during that rainstorm, then the roof would be covered.
Flood: As mentioned previously, flood insurance is completely separate. If you do not have this type of insurance and experience a flash flood, you will not be covered.
In sum, the following are not covered by your homeowner’s insurance:
Anything considered to be caused by homeowner neglect
If you experience an incident which will be covered under your insurance, you have two pay-out options. The first is called Actual Cash Value. This will pay you for the value of your damaged property based on what is it worth today. So, if your couch is ten years old, the insurance company will pay you much less than the amount you spent to buy it new. The second option is called Replacement Value. This comes with much higher premiums, but you will be paid enough money to actually replace the couch that has been damaged, even if that is more than you spent on the original piece of furniture.
The experience of my sister and brother-in-law is, unfortunately, all too common.
Every single day, about 14,000 people experience a water-damage emergency. This includes situations both at home and work.
Of all home with basements, over 98% will experience some time of water damage.
About 37 percent of all homeowners claim to have experienced some water-damage to their home. That’s over a third of all homeowners.
The resulting costs are staggering. The average cost of water damage to the homeowner is almost 7,000 dollars, while insurance companies pay out over 2.5 billion dollars to cover water damage and mold incidents in the U.S.
Consider the following is a chart from besurance.com and Water Damage Defense:
As you can see, floods generally cause the most damage. But, that isn’t to say that other types of water damage incidents aren’t significant. Especially when you’re considering the fact that even the smallest average cost is still thousands of dollars.
Steps to Take
To prevent any water damage, consider the following tips:
- Regularly schedule an appointment with your plumber to inspect your water heater and toilets.
- Replace old appliances and hoses as soon as they show any sign of wear. Make sure your new purchases comply with the highest standards.
- Before leaving the bathroom, make sure that the toilet stops running.
- Pay attention for signs of wear in your pipes. This can be everything from a leak to noises, rust, and moisture buildup.
- Place a sump pump in your basement to remove any excess water that may collect. Have a backup sump pump too, especially if you live in an area that receives a lot of rain.
If you ever experience water damage in your home, take the following steps:
- Find and stop the water leak
- Remove all excess water from the area
- Make sure to prevent mold buildup by drying everything that got wet as best as you can and providing air circulation
- Cover up any areas with a tarp to prevent any more damage
- Document the damages. Take photos and compile a list.
- Contact your insurance agent
There are different types of water categories, which your insurance company may take into consideration when determining your claim. This also affects how to treat the damaged areas.
Category 1 Water: considered to be clean and uncontaminated. This type of water is not harmful to humans or animals and usually comes from overflowing sinks, bathtubs, and broken water lines.
Category 2 Water: this is also called “Grey Water” and probably has some contaminants which may be harmful to humans or animals. Areas which may spew grey water are dishwashers, washing machines, toilets, and sump pumps.
Category 3 Water: also called “Black Water” it is highly contaminated and may contain harmful bacteria. Its sources include water from rivers, streams, the ocean, groundwater, and standing surface water. If you fail to clean up after Category 2 Water within 72 hours, it may turn into a Category 3 situation. You and your family should avoid contact with this water and contact a professional for clean up.
Remember: one thing that is often not covered by your homeowners insurance is mold. So, do everything you can to dry affected areas in your home. If you discover a hidden leak which has resulted in a mold buildup over time, your insurance claim will likely be denied. However, still contact your insurance company immediately to see if any of the damage can be covered. Also call a mold-removal company as the spores had cause ill effects to the health and well-being of everyone entering the home.
Since your insurance may not cover damage caused by mold, consider the following list on how to prevent, spot, and remove mold.
“Dry any spills or leaks within 48 hours
Clean gutters frequently
Keep indoor humidity below 60 percent (if you use a humidifier)
Activate bathroom vent or open a window while showering
Vent appliances that produce moisture (stove, dryer, etc.) and use fans when necessary
Insulate cold surfaces
Avoid wall-to-wall carpeting if possible
Don’t store paper products or clothing in humid areas
Clean fridge drip pans regularly
Ensure rainwater flows away from the house”
“Check for an earthy or musty odor
Angle a flashlight at the wall to reveal color contrast
Look behind shelves and dressers, or anywhere the air is cold and not ventilated
Pat pillows with a spatula to see what dust comes up
Check surfaces for a slick or slimy feel”
“Wear long sleeves, goggles, and rubber gloves
Use a respirator
Ventilate the room while cleaning
Separate infested area from the rest of house with plastic sheets
Place used cleaning items in airtight plastic bag”
Other Enhanced Insurance articles related to Home Claims:
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The best resource for any additional questions you may have is your homeowners insurance agent. They will be able to cover more specific questions you may have. The following is a list of additional sources you may want to investigate: