If you’re one of our local customers in Port Clinton, Oak Harbor or elsewhere in Ottawa County, you are most certainly aware of the havoc 8 inches of rain overnight can cause. Most people were fortunate to be in the right area, have a home built high enough or have the safeguards in place to prevent water damage. Some of us, yours truly included, were not so fortunate. Let’s take a look at what insurance can do to help you out and when you’re on your own.
First, let’s define what water damage is as coverage is restricted by your Homeowners or Dwelling Fire policy. Below is one company’s exclusion of “Water Damage” :
(3) Water damage, meaning:
(a) flood, surface water, waves, tidal water or overflow of a body of water. We do not cover spray from any of these, whether or not driven by the wind;
(b) water or sewage from outside the plumbing system that enters through sewers or drains;
(c) water which enters into and overflows from within a sump pump, sump pump well or any other system designed to remove subsurface water which is drained from the foundation area; or
(d) water below the surface of the ground. This includes water which exerts pressure on or flows, seeps or leaks through any part of a building, sidewalk, driveway, swimming pool or other structure.
This exclusion does not apply to ensuing direct loss to covered property caused by theft, fire or explosion.
As you can see by the above definition, there is not a large variety of water damage that is actually covered by a Homeowners Policy. The Dwelling Fire, Special Form, is going to have a very similar definition. So what do you do to protect yourself against these types of claims? There are two common answers: Flood Insurance and Water Backup Coverage.
Flood Insurance is specifically designed to protect the main dwelling on a property, detached garages or commercial buildings from water damage that is excluded by the Homeowners, Dwelling Fire or Commercial Policy. Coverage can be very inexpensive if you are outside of the 100 year flood plain, commonly referred to as the “Flood Zone”, which is what FEMA calls Zone X. You can get $50,000 in flood coverage for just $200-300. If you are in the “Flood Zone”, coverage will be much more expensive but will still provide very important protection when water damage occurs.
Your other avenue to help with a leading cause of water damage is Water Backup Coverage. Each company may have slightly different wording but they are all addressing the same issues which are (b) and (c) in the exclusion listed above. This endorsement provides coverage for water outside of your plumbing system that enters through sewers or drains and water that overflows from a sump pump system. This is a very common occurrence and the largest cause of damage for most of our customers in the recent rain storm. If you have waterproofed your basement properly, this is the most realistic way for water to enter your home and cause damage.
This coverage can be purchased for an additional premium and provides coverage of $5000 to, with some companies, $50,000 in coverage depending on the amount of Dwelling Coverage on your policy and where your home is.
What amount is right for you? Well, it depends on what is in your basement or crawlspace where damage is most likely to occur. Add up the replacement cost of everything included your personal property and structural materials like drywall, flooring, framing, electrical, etc. but you will also need to add the cost of having the water removed, the area cleaned and dried to this cost. Some coverage is better than nothing, but I would advise you to err on the side of caution as disaster mitigation companies are very expensive (for good reason!).
Another important aspect of this coverage is that it will help in the case of back ups from other areas besides your sump pump system such as toilets and sinks. These can also back up if the back flow preventer fails or you don’t have a back flow preventer.
Hopefully, this gives you enough information to be better prepared for water damage in the future. Call the Frederick Agency today at 419-732-3171 to explore your options and get a quote.
By Brennan Madison