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When Does Homeowners’ Insurance Cover a Flooded Basement?

Friday, April 22, 2022
homeowners flood insurance

A flooded basement is one of the most ambiguous insurance situations a homeowner can find themselves in. Some situations are covered by home insurance, while others require special types like flood insurance or a sump pump water backup endorsement.

Why Does Home Insurance Not Cover All Damage?

Oftentimes, homeowners will be frustrated with a denied claim for insurance. It is important to understand that home insurance policies are intended to replace damaged property or protect customers against sudden and spontaneous losses. Essentially, damage not caused by normal wear and tear, preventable hazards / issues or routine maintenance. The insurance company offers an insurance policy with the expectation that the homeowner is being proactive in maintaining their property.

What Can a Standard Home Insurance Policy Cover?

There are numerous reasons your basement could flood. If any of the following instances happen in your basement, you could likely be covered if you have a standard home insurance policy:

  • Flood caused by broken appliance: If the washing machine, AC unit or refrigerator in your basement malfunctions and floods the entire room, the water damage is typically covered under a standard homeowners insurance policy. However, there is a chance that your insurer could argue that the damage was a result of a lack of maintenance. If they can prove the appliance broke because you hadn’t taken care of it for a while, they can deny your claim. A truly faulty appliance malfunction will always be covered. 

    It is important to note that the cost of the new appliance itself won’t be covered under the claim. So, to be clear: the flooding caused by the broken appliance is covered, but you have to buy the new washer or unit out of pocket.

  • Flood by leaking water heater: Damage from a leaking water heater is covered under the same provision as leaking appliances. Again, you must be aware of whether the water heater is leaking due to neglect or malfunction. If your insurer finds any proof the cause of the leak was poor upkeep on your part, your claim will be denied.
  • Freezing pipes burst: If one winter night the temperature drops and your pipes burst from the freezing water, your home insurance policy would cover the damage of that flood. Burst pipes from an AC unit, sprinklers and appliances are also covered if they freeze. The main condition is that you have to be living in the home while it was flooded. 

    The only exception is if it can be proved you were still maintaining the home with heat or turned off all the water systems – this commonly occurs when homeowners go away for a winter vacation. This is an important factor to consider if you have a secondary home in a cold climate. 

  • Flood caused by overflowing tub, sink, pool, etc.: You may be surprised to learn that if your basement is flooded as a result of an overflowing tub, pool, sink or any other receptacle for water, you would be covered by your home insurance policy. Such a calamity is considered “sudden and accidental,” and your insurer will foot the cost for replacing what was destroyed. So, if your child decides to fill the toilet in the basement with all the toilet paper in the house and proceeds to flush many of times, your home insurance policy will typically cover the resulting flood damage.
Are There Instances Where Homeowners Insurance Won’t Cover Floods? 

Unfortunately, there are also situations where you would not be covered by a homeowners insurance policy if your basement is flooded. For example, standard policies don’t include rising water from a storm, surge or heavy rains. 

Essentially, any flooding caused by nature will not be covered under your home insurance policy. For all rising water situations, only flood insurance can save your basement – and even then, coverage is limited. 

Flood insurance will cover certain objects in your basement, such as most personal belongings and appliances. However, it typically will not cover the structure, such as finished ceilings or floors. When you take out a flood policy, you will need to purchase both dwelling and contents coverage to get the maximum coverage for your basement. 

The best defense against a flooded basement is a functioning sump pump that pushes the water out. Preventing a flood from occurring in the first place will usually be the cheapest and least disruptive option, especially if you have a finished basement. If your sump pump fails as well, there is additional “sump pump coverage” you can buy as part of your home insurance policy that ensures your basement up to $25,000 in case of pump failure. Of course, it would have to be a malfunction and not a result of the poor upkeep of the system. 

Is Your Home Protected Against Floods? 

Floods can occur at any time, and it’s best to prepare accordingly. To determine how much coverage you need, set up a consultation with one of Horton’s personal insurance experts. We can help you evaluate your risks and ensure that you are covered accordingly. 

Material posted on this website is for informational purposes only and does not constitute a legal opinion or medical advice. Contact your legal representative or medical professional for information specific to your legal or medical needs.