Knowing which water perils are (and aren’t) covered can help ensure you don’t get soaked come claim time.
When it comes to insurance, not all water damage is the same. Let’s look at how perils such as flood, water backup, and seepage differ:
Flood
Flooding—water damage that occurs from water breaching an egress threshold of your home (for example, a window or doorway)—is defined by the National Flood Insurance Program (NFIP) as “A general and temporary condition where two or more acres of normally dry land or two or more properties are indundated by water or mudflow.”
Despite being the top natural disaster in the U.S., most homeowners insurance policies exclude flood coverage—a fact many homeowners only discover after they run into an issue.
Flood plains
If you live in a flood plain, your mortgage company will likely require you to buy flood insurance. But even those who don’t live in designated flood plains should evaluate their situation and seriously consider buying Flood Insurance—1 in 4 flood claims is for a home that isn’t in a flood plain.
But beware—flood plains (and flood plain maps) change and evolve. Just because you weren’t in a flood plain when you bought your home years ago doesn’t mean you’re not in one now, so continue to check your status periodically.
Basic Flood Insurance is often inadequate
When it comes to the physical structure of your house, federal flood insurance policies top out at $250,000. For personal possessions, the cap is $100,000.
Understanding that basic flood limits would not be enough coverage for most clients, Forest Insurance offers flood endorsements with broader definitions and limits—up to $1,000,000 to the home’s structure, up to $300,000 for damaged personal property, and up to $250,000 for additional living expenses while you restore your home. In addition, these endorsements extend coverage to include incidents that may fall outside of the NFIP’s definition of “flood.”
Water Backup, Sewer Backup & Sump Pump Failure
Water backup coverage protects you from water that comes up through any drain or sewer in your home and causes damage. The bulk of home water claims are Water Backup claims—resulting from heavy rains overwhelming a sump pump system, or a power outage coupled with heavy rains where a sump pump simply can’t run.
Mitigation efforts such as back up generators, batteries and monitoring systems can help, but none of them is fool proof. If you have a finished basement, it’s worth a review of your current policy to make sure you have adequate Water Backup coverage.
Though most companies offer limited or no Water Backup coverage, ALL of Forest’s companies provide Water Backup coverage with basic limits that can be increased for an additional premium.
Seepage
Problems from seepage (for example, water seeping through a crack in the foundation) are considered maintenance issues and are generally not covered by insurance. Thankfully, Forest Insurance has one company that does offer Seepage coverage.
The Bottom Line
For more information on adding a Flood, Water Backup, or Seepage endorsement to your homeowners policy, contact Forest Insurance at (708) 383-9000 or visit www.forestinsured.com.
