let's talk about insurance against water damage

20 years ago

So it's about time for me to renew my homeowner's insurance for another year and I'm thinking about protection against water damage. I guess there are three kinds of events I can think of:

1. flood, or surface water flood: I don't live in a flood zone, but my neighbors have a depression in their backyard which is a village instituted requirement for a storm sewer overflow. I'm thinking I want to be protected against something like this. I have no idea how to value a policy against the kind of damage that I can have.

2. sump pump backup: the insurance company offers a rider for $10k worth of coverage against this event

3. water damage from spills/leaks: I guess I worry about some plumbing link between the floors or something like an appliance malfunction that might go undetected for some time.

I don't know enough to even have an intelligent conversation about where to begin? Anyone have pointers to good sources of info.

I'm also welcome to advice from folks with experiences, good or bad, with dealing with these types of situations. FWIW, I have a sump pump and a sewer sump pump in a basement that is, and will remain for sometime, unfinished.

TIA

-a

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Comments (4)

davidandkasie
20 years ago
as far as flood goes, unless you buy a federally backed flood policy, you are NEVER covered in the event of a flood. this is seperate from you home owners insurance. mine costs 842.00 a year, and that is because i am in a high risk area.

2. i have no experience with

3. the problem with this is that the ins co is always going to argue that they will fix on the pipe that ruptured, but will not cover any incidental damages to get TO that fixture. ask your agent what hte best option is, otherwise you can be just throwing away your money. i have HEARD of people whose pipes burst and the ins co paid for new plumbing in the affected areas, but the home owners were responsible for damaged walls and floors, even what had to be ripped out to reach the burst plumbing. i do not know this for a fact, but have heard it on numerous occassions so make sure with your agent.
devorah
20 years ago
Another thing to consider is: if you do have water damage are you going to report it? If you do, you may lose your ability to insure that house with anyone for anything again. My daughter had a terrible time getting insurance after she had a pipe burst in her home and what she got is costing her a fortune. Many lenders won't lend on a house that has had a water claim for fear that there is a mold issue so even with full disclosure to a willing buyer you might have trouble selling your house
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Airqual guy, many of those problems have lessened since insurance companies have limited mold coverage. The coverage for mold is usually capped at $5,000.00 now so those large insurance exposures have been severely averted. I have heard of people getting dropped for multiple water claims but there were other factors involved such as the condition of the house. I have never heard of insuredÂs being dropped for inquiring about a claim. If a person was dropped without a claim; it was because the homeowner did turn in a claim and the claim was denied. If the water problem was caused by a plumber or builder, I would call them to see if they would cover it. Your insurance will at least subrogate against another party if they were at fault. In short, if you can afford not to turn in a claim, DONÂT. If you have no choice, I wouldnÂt worry about turning in a claim for this issue unless you have a bad claim history.
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piedmont
20 years ago
Totally agree about everything posted.

1st) Flood insurance usually states they will not cover you in a situation it is deemed an act of God. So, pretty much that only means a pipe bursting. If there is an actual flood that damages your house or a hurricane, well, that's an act of God and you're not covered. I didn't know that until I heard many of those in Louisiana who paid for flood insurance went to cash in, and found out it doesn't cover an actual flood or hurricane, those are acts of God. Kind of takes the wind out of flood insurance. Do like DavidAndKasie say, and make sure it specifically stipulates you're covered even if it's an act of God if you get it.

2nd) Read Devorah's post, carefully. Before I bought my house, my mortgage person first thing said, "Give me the address, let's check to see if the previous owners took a claim on water damage. If they did, you won't be able to get a mortgage for that house". Once you cash in on water damage, now the insurance company usually will drop you, you will have a very hard time trying to pick up someone else as you're now marked, and you will have a hard time trying to sell your house as you'll have to find someone who's mortgage company will actually let someone buy a house that's claimed water damage. Insurance companies are afraid you've created a mold/mildew issue and they don't want to risk the medical repurcussions of the individual(s) or anyone moving into that house who gets sick.

In my opinion, flood insurance is a hoax. If you win the fight, you've lost the war as now you're marked as a potential health risk from then on, your house is flagged as a safety risk, anyone buying your house from then on will have a hard time trying to purchase it, and you will have a hard time trying to find a mortgage company to back you. Better off just paying for the damage out of pocket and keep your insurance out of it. A guy at work is convinced you can't even call up your insurance company and ask them about water damage. He said he had a pipe burst in his house and called up his insurance company. They got his name, and account, and then all he wanted was an honest answer from them if it was just better he take the hit or have a claim. After discussing it with other people at work, everyone was like, DO NOT get the insurance company involved or have a claim. Well, a month later his insurance company cancelled his insurance without reason and sent him a check for the remaining balance. Think it was coincidence?

So, that's how I understand it. You have to take what I say with a grain of salt as it's all what others have told me but no actual proof or backing.
housenewbie
20 years ago
If all you're really worried about is water backup in your basement, better to put the furnace etc. up on blocks and leave insurance out of it.

I too have read about people getting screwed when they have something happen like a leak and they can't ever get home insurance again. It's the new thing in insurence, like a credit report--you get blacklisted as a 'bad risk' and it's all over. That's why I wouldn't think of having a washing machine in the 2d floor.

let's talk about insurance against water damage

Comments (4)

davidandkasie

devorah

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