Common Holes in Homeowners Insurance Coverage

4/11/2018 (Permalink)

Call your insurance agent to find out what your policy actually covers.

There are many times when our SERVPRO crew is called to a flooded basement. They begin to make the assessment of damage and then call the homeowner’s insurance provider only to find out that the homeowner did not carry the correct insurance to cover a water-loss in the basement. You can imagine what that might feel like when you have $5,000-$25,000 worth of water damage staring you in the face.

It is disheartening to know the damage isn’t covered and a homeowner has become liable for the cost incurred to get their house back to livable conditions. It’s our goal with this post to educate homeowners. We want you to know what you need to be asking your insurance agent when you set up your home’s insurance policy.

Here's the main take-away: 

Get a Water Back Up and Sump Pump Insurance Rider

Action item: Call your insurance agent to find out what your policy actually covers and get the rider for sump pumps and water back up if you don't already have it.

Reason #1: It’s not included in a standard homeowners insurance policy.

Reason #2: It’s fairly inexpensive.

Reason #3: Water backups can happen to anyone.

Reason #4: It qualifies you for Loss of Use coverage if your home is uninhabitable.

Homeowners many times assume that if their sump pump backs up the damages will be covered under the “Sewer and Drain Back-Up” portion of their policy. But most sump pump failure is NOT covered under regular homeowners’ insurance policies UNLESS you specifically add the appropriate rider. This rider covers you if the sump pump stops working due to a power outage, and may or may not provide coverage for mechanical failures.

The cost of this rider is typically around $100 a year and is well worth the additional coverage it provides in security.

Even if you add a sump pump rider to your insurance policy, you will need to take extra precautions to ensure that you will be covered if the pump fails and results in water damage. When you make a homeowners insurance claim, the adjuster is required to do his or her due diligence, and that means that your sump pump will be inspected. If it is not found to be in good working order or if it’s clogged with debris because if improper maintenance, your claim could be denied. Not only that, but you could face an increase to your insurance premium.

Depending on your insurance company and the circumstances surrounding the flooding, the dollar amount that is covered in your situation can be low. The damage to your property and the resulting work to fix it may not be fully covered under your policy.

Every homeowner wants peace of mind when it comes to protecting their property and their family from water damage. If you aren’t sure if you are covered, please call and ask your agent today. Spring is surely on its way and we would hate to see you start your summer with bills racking up if you were to experience a sump pump failure or water back up.