With the recent rains and hurricane season in full swing, now is a great time to talk about the difference between flooding and water damage—and why some water-related damage is covered by your insurance while flooding is not.
As many people discover (either from their agent or through experience), flooding is an excluded loss under standard home insurance policies. But why is that, and why are some types of water damage still covered?
Why isn’t flooding covered?
Flooding is excluded because of the potential for widespread damage. If a storm causes flooding and multiple homes in an area are affected, the losses could be so significant that they could overwhelm an insurance company’s funds. This is why most insurers refer you to the National Flood Insurance Program (NFIP) for flood coverage, as it is a separate type of protection specifically for floods.
What types of water damage are covered?
On the other hand, certain water damage—like a burst pipe or a leaky water heater—is often covered by home insurance. Other examples include water damage from a tree falling on your home during a storm or the bath tub is collogued and the water spills over the edge and causes damage to parts of the home. The key difference is that these situations are individual incidents rather than widespread events affecting many homes at once. A pipe bursting in one home, for example, wouldn’t cause damage to all the homes in the area.
Why understanding your policy is crucial
It’s important to review your home insurance policy to understand what is and isn’t covered. Knowing your coverages can help you navigate unexpected losses and ensure that your home is adequately protected.