Storm Season: Are You Covered for Water Damage? 07.16.2015
If you owned a home in New Jersey or the New York metro area in the past five years, you may be very familiar with the issues of water damage to your home. Many people are under the misconception that all water damage is covered under their homeowners’ policy. However there are some major exclusions to the policy. Flood is one where surface waters enter the home and a flood policy would be required to provide coverage; and seepage of water through the walls of the home will always be excluded under any policy. However, one additional coverage you can add to your policy is water backup which covers damage from water and/or sewage that backs up through drains, as well as the mechanical breakdown or loss of power to a sump pump. This endorsement provides coverage in two ways.
The first part pertains to the backup of drains. If there is any damage caused by the backup of water or sewage coming into your home resulting in a collapsed drain or blockage, coverage will be afforded. The second part applies to a sump pump, in the event the sump pump mechanically breaks down or if there is a loss of power to the home where the pump cannot operate. The water backup endorsement would typically provide coverage for these damages.
History from recent storms, including Hurricane Irene and Superstorm Sandy, found many people incurred damages greater than the limit they had on their policy which was commonly $5,000, resulting in additional out of pocket expenses for the homeowner. Even these days, if you have an unfinished basement with nothing but a furnace, water heater, washing machine and dryer; you may have damages close to $10,000 or more! If you have a finished basement, you should consider even higher limits. Do you know how much damage two inches of water in your home can cause to your basement?
Therefore, review your homeowners’ insurance policy with your agent to discuss whether you have this coverage right now, and what limits you are covered for. Many carriers now will have package endorsements that provide water backup coverage for $15,000, $25,000, or higher up to the full limit of your dwelling. If your current carrier does not provide an option for purchasing limits over $5,000 or $10,000, you may want to consider shopping for another carrier depending upon your needs.
Having a sufficient limit of coverage for water backup, will help you breathe a little easier when the next major storm or heavy rains come around!