Many homeowners underestimate the damage that even a minor leak can cause within their home. Depending on which company you buy your homeowners insurance from, you might not have enough coverage to compensate you for the full cost of any water damage you see in your home. Adding water backup coverage to your homeowners insurance policy can be an affordable way to protect you against thousands of dollars of potential damage.
What is Water Backup Coverage?
Water backup insurance is a type of supplemental coverage that can be bundled with your existing homeowners insurance policy and offers protection against certain types of water damage. While homeowners insurance already protects you from financial loss due to certain types of water damage, it does not cover water damage caused by flooding, drain overflows and certain other instances.
To fully protect yourself and your assets from water damage, it is best to consider both flood insurance and water backup coverage. These 2 types of policies offer protection from different types of water disasters. Here, we’ll take a look at water backup coverage in more detail.
Water Backup vs Flooding
A water backup occurs when 1 of your appliances suffers a breakdown that causes it to overflow or otherwise introduce water to your home. Water backups often can cause more damage than simple flooding because as water comes up through your pipes, it may include dirty water with waste still in it. Some examples of instances when water backup coverage could come in handy may include:
- Water that backs up through your sewers and overflows through your toilet
- A washing machine that breaks down, causing water to pour through its connecting pipe
- Water overflow that comes from your sump pump
- Your shower drains clogging, causing water to pour up through the grate
How Much Damage Can a Water Backup Cause?
Water backup in your home can create serious, long-lasting damage to your property. As your water overflows, it’s likely to seep deeply into your hardwood floors or tile, which can cause permanent damage to your flooring. If the backup and overflow occurs on the top floor of your home, the sheer volume of water that’s likely to make its way onto your floor can seep through to the ceiling of the room directly underneath, causing further damage.
If you have carpeting, the water from your backup can seep into the fibers, creating an ideal environment for mold growth.
Water backups are more than just a wet floor. This makes it especially important to know you’re covered for this type of in-home damage.
Do I Need Water Backup Coverage?
Water backup coverage can be an affordable addition to your homeowners insurance policy, providing you with peace of mind for just a few dollars a month. Most insurance providers recommend that all homeowners purchase water backup insurance, but men and women who live in older homes may be particularly at risk for backups. Speak with a local insurance agent to learn more about water backup coverage and flood insurance.
Is Water Backup Coverage Worth It?
It’s often worth the extra expense to invest in water backup coverage for your home. A single water backup can cause thousands of dollars in water damage, plus additional damage associated with any waste that’s in the water when it comes up. You can get water backup coverage for less than $200 a month in most areas.
There are a few instances that water backup insurance won’t help you pay for damage. For example, it won’t help you pay for damage that wouldn’t have occurred if you had followed a regular maintenance schedule. If you’ve been flushing baby wipes down your toilet and it eventually backs up and overflows, your water backup coverage likely won’t help you.
Additionally, your water backup coverage will not pay to repair the damaged appliance itself. For example, imagine that your sump pump breaks down, suffers a backup and causes water to overflow into your home. In this scenario, your water backup coverage will help you pay for any damage caused by the water that has overflowed — but it won’t help you repair the sump pump itself.
Does Home Insurance Protect from Water Backups or Floods?
No standard homeowners insurance policy will include flood insurance, as this type of protection is issued through the federal government and offered by individual homeowners insurance companies with its own deductible and premium. If you believe you need flood insurance, you can typically purchase it from the same company you buy your homeowners insurance from.
Flood insurance is exceptionally expensive when compared to other types of coverages you can add to your homeowners insurance. According to the Federal Emergency Management Agency (FEMA), the average cost of flood insurance is $700 per year. For this reason, most homeowners who aren’t required to buy flood insurance choose to forgo this protection.
Benzinga’s Best Homeowners Insurance Providers
If you’re concerned about protecting your home from water and sewage backup, you may want to add water backup coverage to your homeowners insurance. Begin your search with a few of our favorite insurance providers below.
How to Buy Water Backup Coverage
Though water backup coverage may be included in your homeowners insurance policy, many policy providers indicate that they exclude coverage for damage caused by backed up water systems. You need to review your individual homeowners insurance policy (specifically the section about water damage) to see whether you’re covered for water or sewage backups.
You may see that, though normal water damage is covered (for example, leaking from your plumbing) water damage caused by backups is excluded. Thankfully, adding water backup coverage to your homeowners insurance is inexpensive and easy. Most homeowners insurance policy providers offer this coverage as an add-on that you can purchase directly when you sign onto your policy.
Water Backup Insurance vs Flood Insurance
Water backup insurance is not the same thing as flood insurance. Flood insurance is a unique type of insurance policy that protects you from damage caused to your home by water originating outside of your home. For example, if your toilet backs up and overflows, your water backup coverage will provide you with compensation. However, if you live next to a creek that overflows and makes its way into your basement, you will need flood insurance to cover the cost of this damage.
Some additional example of when you’ll need flood insurance include:
- Overflows resulting from inland or tidal waters
- Rapid accumulation of rainwater on your property that flows into your home, causing damage
- Mudflow that makes its way into your home as a result of overflowing water or torrential downpours
- Collapse or subsidence of land along the shore of a lake or similar body of water resulting from uncommon tidal or wave movements
Do I Need Flood Insurance?
If you bought your home with a government-backed mortgage loan like a U.S. Fair Housing Administration (FHA) loan or a U.S. Department of Agriculture (USDA) loan, and you live in an area that has been labeled a “high-risk flood zone” by the federal government, you are required to purchase flood insurance as a condition of your loan. If you have a conventional mortgage loan, and your home is located in an area that’s at a particularly high risk for flooding, your mortgage provider also may require you to purchase flood insurance.
You can find out whether you’re in a flood zone by searching for your address within FEMA’s Flood Map Service Center here. You can learn more about how to read a flood map and how to assess your home’s unique risk using FEMA’s guide here.
Even if you don’t live in a high-risk flood zone, it’s important to remember that any home can be flooded. Between 2014 and 2018, about 40% of claims made to flood insurance providers were from homeowners who did not live in a high-risk flooding area. You should not depend on a presidential disaster declaration to reimburse you for the total cost of any flooding that occurs in your home as a result of a natural disaster.
According to data from FEMA, the average flood insurance claim made in 2018 was valued at $40,000 — while the average federal disaster assistance grant was just $5,000. Be sure to consider these factors when you think about your home’s risk of flooding and whether you could cover the costs of a major flood.
Frequently Asked Questions
Q. What is considered water backup coverage?
Water backup insurance is an individual homeowners policy endorsement that covers damage resulting from water or sewage backup in your home. Like other coverage add-ons, water backup coverage has a set limit that is not included in your personal dwelling coverage. Flooding is not covered under water backup insurance.
Q. Does homeowners insurance cover leaking plumbing?
Most homeowner’s insurance policies include coverage for damage caused by leaking plumbing systems. However, it’s important to remember that coverage inclusions and exclusions can vary widely from policy to policy. Be sure that you fully read and understand your policy’s inclusions before you sign on the dotted line.
About Sarah Horvath
Sarah is an expert in the insurance, investing for retirement and cryptocurrency space.