Make Sure You Know What’s Covered So You’re Not Out of Luck Later
Water damage is one of the most common home insurance claims, ISO states that it’s actually the second most frequent claim. Water damage is second only to wind and hail damage. The percentage is only increasing while other types of claims remain the same or have actually decreased. With that in mind home owners may be wondering does insurance cover water damage? In addition they might have multiple questions about what is covered in their insurance so they’re secure in any future mishaps.
Insurance jargon is not always plain and clear, homeowners may be confused as to why things like “gradual damage” aren’t included in their coverage. Even more confusing are the list of exceptions and what’s included in that list and what’s not. Here are some examples of some water damage claims to help you better understand the terms used and what may or may not be covered by your home insurance:
- Sudden or Accidental Discharge
- Sewer Backup or Water Back Up
- Storm Related Water Damage
What Types of Water Damages are Covered by Home Insurance?
There are several common questions individuals ask when it comes to water damage and what their home, condo or renter insurance will cover. Here are the most commonly asked questions:
- Is a water leak covered by home insurance?
- Is a leaking toilet covered by insurance?
- Is water damage from a leaking roof covered by insurance?
In order to determine coverage the answer is the same for all of these incidences – it depends on the source of the damage, the type of policy you have and if the damage was an accident, sudden or gradual. Be aware that you may be denied a claim if the incident was gradual, such damages are not usually covered even if your policy includes water damage coverages.
How is Gradual Damage Defined?
When damages occur slowly over the course of time these are considered gradual damages. Most insurance claims commonly fall into the category of gradual damage. Think about it like paint chipping slowly off a wall, it starts with a small section and eventually more and more is slowly uncovered to become a larger space and a larger problem. This is what gradual damage in a home is like.
Gradual Water Damage in Your Home
For the most part we don’t see all of the hidden areas of our homes, we only see the walls, the decorations and the furnishings. Really our homes are much more than what we can see, they are full of pipes, wiring, ventilation systems, ect. Beneath the surface your home is working hard functioning with multiple activities.
It can be easy to forget about routine maintenance considering most of what makes your home run is out of sight, out of mind. Without this regular maintenance however there could be problems occurring without your knowing it. Usually we aren’t aware of these issues until there is a structural concern or some type of physical evidence. This is when most people attempt to make a claim.
And unfortunately when the damage isn’t sudden or accidental the claim is usually denied. That’s why routine maintenance and inspections into these hidden areas is so crucial. If you can stop it before it becomes a larger problem usually your bill won’t be as large either.
Examples of Gradual Damage
Here’s a list of some of the most common examples of gradual damage resulting in losses or denied claims:
*Any kind of plumbing including faucets and pipes leaking over the course of time causing damage to walls, ceilings and/or floors.
*Water damage caused by cracks in the foundation or cracks in the exterior of the home leading to water seepage into the home.
*Deteriorating parts of the roof including flashing, tiles, shingles that indicated they were in need of repair and caused water damage.
*Mold, rot or corrosion
*Deteriorating electrical wires
*Lack or repairs to home or poor repairs
It can be difficult to understand why your claim may have been denied but if the claim resulted from something that had been happening for a while but just came to your attention that gradual destruction you were unaware of can be the reason why most claims are denied.
Are There Instances Where an Insurance Company will Cover Gradual Damage?
In order to determine this you’ll want to look closely at the wording of your policy. You will have to review the exclusions of your policy in addition to the type of coverage you have. Your insurance advisor, agent or broker will be the best individual to help you review the exact wording with you.
Water Damage Exclusions and Exceptions on Home Insurance
All insurance policies will exclude wear and tear along with gradual damage, there are a few exceptions however.
- Example of a Gradual Damage Claim Due to Mold Related Water Damage
There are some companies that will allow you to purchase mold remediation coverage. This depends on what state you reside in and what insurance company you have. Policy makers in states like California and Texas are pushing for more limited basic mold coverage policies. Check with your representative or licensed insurance professional to see if this provision is available to you, keep in mind it may be available by endorsement because each company is different.
- Example of Tree Falling on a Roof Causing Water Damage & Gradual Damage
In the situation where a falling tree causes roof damage where water can enter and pour into the home typically an insurance company will cover the repairs caused by the opening.
If the damage was repaired but several months later the homeowners notice a funny smell, chipping paint or newly formed mold in the area where the damage was initially attended to the same insurance company might, on rare occasions, cover the gradual damage that was due to an original claim that caused the lingering problems.
- Example of Water Damage Caused by a Broken Pipe
There may be gradual damage to a broken pipe, broken water tank or wear and tear to a washing machine that causes it to suddenly break down. The actual pipe and/or washing machine won’t be covered, however, the damages your home may have incurred due to the machine breaking down might be covered.
Definition of “Resulting Damage”
Resulting damage and initial damage are two separate occurrences. Taking the washing machine example from above, the initial damage would be the washing machine breaking down. The resulting damages would be if the washing machine leaked and caused damage to the flooring or trim in your home due to the broken machine. You will want to check the wording of your policy to determine if you are covered for initial damages and/or resulting damages. If you are covered for initial damages your washing machine would be covered, if you are only covered for resulting damages then the washing machine wouldn’t be covered but you will be compensated for the damages caused by the machine breaking.
Understanding Why Your Water Damage Claim is Denied and What You Can Do
When a claim is denied be sure to ask for a full explanation as to why it’s being denied. It is your right to know all the details as to why you weren’t covered and how the policy is worded excluding what you are asking for compensation for.
There are several individuals who represent the insurance company when a claim is being processed, be sure you know where the decision on your claim is coming from. Your agent, the insurance adjuster and a contractor are all different types of professions involved in a claim and each plays a different role. Don’t be afraid to ask for clarification which will help prevent misunderstandings. If your claim is denied you should receive an official decision in writing explaining the decision.
If after reviewing the document there’s still confusion as to why your claim was denied and you feel there is still a chance for a review of your situation, be sure to ask your agent or representative for a review of the document and/or a second opinion.
Why Was My Coverage Denied?
One area to explore further is to look into whether or not coverage would have been available to you through an endorsement. Determining what is currently covered and what could be available on your insurance for future reference can help in any future incidences that may occur. You may want to discuss with your agent why you didn’t have this opportunity in coverage in the first place. If another insurance company offers the coverage your seeking and your current company does not it may be time for a change.
If you’re convinced that your coverage should have been applied to your situation, you can get a second opinion by a licensed professional or consumer advocacy organization that is familiar with your region and the insurance provided in your area. You might also check to see if your insurance company offers the services of an ombudsman that can help review your file. Or contact your state insurance commissioner for insight or to file a complaint.
How to Avoid Having Your Water Damage Claim Denied
Here are some steps you can take that may help in preventing your claim from being denied:
*Keep records of any repairs and professionals hired to perform maintenance on your home over the years. It’s helpful to have these on hand in the event of a loss.
*Have a firm understanding on your insurance policy and what all is covered in it. Make sure you especially know what exclusions come with it and what falls under your responsibility as a homeowner.
*Spring and Fall are ideal for scheduling routine maintenance checks on your home. With routine checks you’ll avoid major surprises and large expenses.
*Make sure when setting up your insurance policy you find the right coverage for you. Be sure to look into coverages that you can add that may be ideal for you situation.