Does Home Insurance Cover Water Damage? What Homeowners Need to Know

Understanding Water Damage Insurance Coverage

Water damage can be a devastating experience for homeowners and business owners alike. Understanding what your insurance covers, and what it doesn’t, can make all the difference when disaster strikes or more afterwards in the cleanup and restoration process.

Many insurance policies include water damage protection, but the specifics vary based on the type of policy and the cause of the damage. Sit tight, there is a lot to go over to fully understand water damage and your insurance policy, in fact, this will not cover your insurance policy, but general insurance coverage norms. 

Home Insurance Navigation (Cheat Codes) for Water Damage

Keep in mind, if you are seeking support in dealing with this insurance headache, we are here to help! Call us for assistance from the beginning of your water damage recovery process. 

We will work with insurance throughout the home restoration process to make sure all aspects that can be included as “covered”, are included in our reports, and paid for by insurance. 

The organization of receipts, rapid action, and the destruction of your home make for a weak foundation of support for battling insurance companies with very organized records. 

We are here to be a resource to homeowners fighting water damage claims as well as the restoration process to completion. 

Common Types of Water Damage Covered by Insurance

Homeowner’s insurance policies typically cover certain types of water damage, but not all incidents qualify for a payout. Some homeowners insurance policies have specific exclusions, such as damage caused by earthquakes, mudslides, or water seepage through the foundation.

Here’s what most standard homeowner’s insurance policies include:

• Sudden and Accidental Discharge: This includes burst pipes, sudden plumbing failures, or accidental overflows from appliances.
• Storm-Related Damage: Rainwater damage caused by storms may be covered if the water enters due to roof damage or another structural failure.
• Fire-Related Water Damage: If water is used to extinguish a fire and causes additional damage, most policies will cover it.
• Some Sewer Backups (With Additional Coverage): Standard policies often exclude sewer backups, but you can purchase an endorsement for this protection.

Most policies cover sudden and accidental water damage (burst pipes), but they often exclude gradual damage due to neglect or lack of maintenance, such as slow leaks or long-term deterioration. If the insurer determines that the damage resulted from failure to maintain the property (e.g., ignoring a leaking pipe or a failing sump pump), they may deny coverage. 

Also, standard homeowners insurance typically does not cover flood damage (e.g., rising water from storms, overflowing rivers, or storm surges). Flood coverage requires a separate policy. Similar cases of water damage caused by a backed-up sewer or drain is often excluded unless the homeowner has purchased additional sewer backup coverage.

Many policies have limitations on mold coverage, particularly if it results from unresolved leaks or prolonged moisture exposure. Some policies may offer mold remediation as an add-on. 

Water Damage Not Typically Covered by Insurance Policy

Despite the broad protection offered by many policies, there are common exclusions that homeowners should be aware of:

• Gradual Leaks: If water damage is due to neglected maintenance or a slow leak over time, insurance companies often deny claims. It is always important to take fast action against any water leaks to make sure insurance will cover the damage and repairs. 
• Flooding: Water damage from rising water levels, storm surges, or overflowing rivers is not covered under standard homeowner’s policies and requires separate flood insurance. Many in SoCal do not have flood coverage, recently some San Diegans had some bad luck with massive flooding. 
• Mold Resulting from Unaddressed Moisture: If mold growth is due to negligence, insurers may not cover remediation costs.
• Sump Pump Failures: Unless you have a specific rider, water damage from a failed sump pump is typically excluded.

“Working with Orange Restoration La Jolla on Water Damage Restoration projects has been a pleasure. They are honest, punctual (which is a big deal in that industry), and efficient. La Jolla residents that need help cleaning up a flood, or repairing the water damage after shouldn’t hesitate to call them!” –5 Star Google Review

Want to avoid mold? Be sure to Clean Up Water Damage FAST!

Before you attempt to figure out just how water damage occurred, it’s important to deal with it as soon as possible. You’ll need to locate the source and stop it immediately so that no further costly damage can happen. And this includes the resulting growth of mold and mildew.

When water is leaking in your home, it’s a ticking time bomb of mold growth waiting to bloom all over your home. Excess water means excess moisture, providing the perfect breeding ground for mold spores to travel throughout your ventilation system, and smelly mold to collect on your walls and ceilings.

In addition to being unsightly and odorous, mold can cause serious health problems, particularly if someone in your home suffers from asthma. Exposure to mold can cause runny noses, coughs, nosebleeds, congestion, and sinusitis, as well as serious upper respiratory ailments like bronchitis.

Unfortunately many insurance companies are restricting mold damage coverage, however, some mold damage may be covered assuming it was caused by a covered peril (flooding due to a heavy storm, for instance). Regardless of the cause, you should immediately report any water damage to your insurance agent, just in case there is coverage for that particular damage.

Steps to Take When Filing a Water Damage Claim

When dealing with water damage, quick action is essential. 

Here’s what you need to do when filing a water damage claim with your insurance company:

1. Stop the Source of Water: If possible, turn off the main water supply or address the immediate cause. If you do not know where to find this, call a professional, we have a master plumber on our team, so you can call us! 
2. Document the Damage: Take clear photos and videos of the affected areas before any cleanup begins. This part can be daunting, we handle this if you call us in to handle your restoration project from start to finish, and we are here to help with insurance paperwork to make sure you get coverage where policy coverage is clear. 
3. Contact Us or Your Insurance Company: It is best to have an expert reach out to insurance companies to report the damage as soon as possible and follow their instructions on next steps to make sure that coverage is discussed and if there are any details the restoration team must adhere to move things along as soon as possible.  
4. Mitigate Further Damage: Insurers often require policyholders to prevent additional damage. This may include removing standing water and drying out affected areas and any tactics to prevent mold. We are experts in mold remediation and prevention. If you are in need of an effective dry out, we use professional grade airmovers, dehumidifiers and techniques to rapidly remove moisture.
5. Keep All Receipts: If you need emergency repairs or temporary housing, keep receipts for potential reimbursement.
6. Work with an Approved Contractor: Some insurance providers prefer that you work with a their certified water damage restoration company to ensure coverage. 

My insurance says I have to use their contractor?

Your house is flooded, you’re stressed, you don’t know who will pay, when, how will it all get fixed, and the emotional toll of a home emergency that comes unexpectedly is always high for you and your family. 

You call your insurance agent who tells you to file a claim, and the adjuster tells you not to worry, just call Water Damage Company ABC and they’ll take care of everything for you. 

This is a common scenario. Should you call this contractor? 

We recommend you always go with the contractor you feel most comfortable with, regardless of if it’s the one recommended by your insurance or not. The fact of the matter is your insurance will work identically with a company they “refer you to” or to a company you contract on your own.

Insurance professionals may have different reasons to recommend you call a specific company. It could be based on a company wide policy to refer only to a specific company, it could be a company from a list of merely “suggested” contractors, it could be based on a personal relationship with the owner of the company, or based on any number of backend deals or agreements you may not be aware of the details.

When given a phone number of a contractor who could solve your problem you should remember 3 key points.

1.  Always check references, license expirations, liability insurance, BBB rating, and any other means that would help you establish that you’re dealing with a good, legal, licensed, reputable company. Don’t be ashamed to speak to the owner or a past customer, even in a time of emergency – to make sure that you are comfortable with all aspects of the contractor and their water damage restoration protocols. Also, you can ask if they have dealt with Medically Sound Mold Prevention.
2. Your insurance is obligated to pay for the repair of all items to their pre-loss condition on any covered claims whether you choose the contractor suggested by your insurance, or you chose one yourself.
3. In the state of California, all water damage restoration contractors are governed by the CSLB, the California State Licensing Board, and all clients of contractors are guaranteed by law the ability to cancel any contracting agreement with no questions asked within 3 days of signing anything unless clients specifically waive this right. You realized after a small delay the guys you’re working with are not the ones you want to? You should be able to get them off the job immediately with no explanations and have to pay ONLY for what was already performed. Read any contract very carefully and watch out for a waiver for this right within the contract.

Please note that this article gives nothing but some general guidance. There are so many types of insurance policies, and insurance carriers with different rules that we cannot possibly predict whether your claim will be covered in any given case. 

To find out if a certain problem is covered by your insurance please read your own policy carefully, and then consult your insurance professional.

What to do about Homeowner’s Insurance Deductibles?

You have a high deductible on your policy? $500? $1000? Or even more? My honest advice would be to try and work out a deal with your contractor to help you with this charge. 

Your contractor would write up the invoice for the job at a certain amount, bill your insurance, who would in turn send you a check for that billed amount less any deductible amounts you may owe based on the agreement of your policy. 

Let me tell you a professional secret – water damage restoration is a very lucrative industry. While the specialists you hire do perform legitimate and absolutely necessary service, they also get paid by insurance amounts which leave them often with quite a bit of wiggle room. 

Your property cost $10K to repair? Think it’s fair for you to ask your contractor to absorb your $500 deductible, or at least split it with you.

How to Ensure Maximum Insurance Payout

Navigating the insurance claims process can be complex! We recommend working with professionals to help along the way, or if you are already in too deep. Call us up! 

Even before the flood or water damage has arrived, we can help with discussing it by reviewing your policy. 

We recommend you review your policy annually ensuring you fully understand your coverage and are keeping an open mind to recent occurrences in the neighborhood or region. In the case of the recent Los Angeles fires, or like if you live in a flood-prone area where additional insurance may be necessary. 

Taking preventative measures, such as inspecting and maintaining your plumbing and roofing, can help you avoid claim denials due to negligence. 

You may also want to consider additional coverage, such as endorsements for sewer backups, sump pump failures, or mold damage, to provide better financial protection.

 If your insurance company offers a low settlement, hiring a public adjuster can help negotiate a fair payout and ensure you receive the compensation you deserve.

Water damage can be overwhelming, but knowing how your insurance works and how to navigate claims efficiently can ease the process. If you experience water damage, acting quickly and understanding your policy’s details can make all the difference in restoring your property most efficiently. 

When is the Water Damage Insurance Process Complete?

Once the adjuster has finished assessing the water damage, you will find out within 2 weeks whether or not your claim has been approved. You usually have to wait for the insurance claim to be approved before you are allowed to start throwing items away and make repairs to your home. 

After all, that is what the insurance money is supposed to be paying for. On the other hand, if your claim has been denied because the adjuster believed the damage was caused by an ongoing leak that was left unrepaired, then you should request a second opinion from a public adjuster. 

If they find your claim to be legitimate, they will forward their findings to your insurance company and it could possibly cause the company’s denial to be reversed.