Each seems each year brings more rain to Ohio, and more water in basements. However, homeowners insurance policies treat water differently depending on its cause. And not ALL water is covered under the homeowners insurance policy, whether via the basic policy or even as an addition to the policy.
So, let’s dig in and talk about the differences between water backup and flood, as these will determine how (or if) a claim is paid. We’ll also discuss available insurance solutions for these two common homeowners insurance exclusions.
What Is Water Backup?
A standard definition is this: water or sewage that backs up through sewers or drains, or which enters or 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.
To bring this definition to life, here are several examples of water backup claims we’ve seen:
- A floor drain in a basement gets clogged and the water backs up through the drain onto the basement floor.
- The same drain could get clogged, but instead of water, raw sewage backs up through the drain onto the basement floor.
- The amount of rain is too much for a sump pump to handle and it can’t keep up with draining the water. The excess water backs up onto the floor.
The most important thing to note is that Water Backup is a common homeowners insurance exclusion, BUT can often be “bought back” via an endorsement called, naturally, “Water Backup from Sewers, Drains or Failure of a Sump Pump”.
Coverage amounts vary, but typical limits include $5,000, $10,000 and sometimes even up to the amount of dwelling coverage (Coverage A on the policy). Typical premiums for our area range from $50-$150 for the year (and equates to $5,000 to $20,000 in coverage). To keep it in perspective, $150 a year is approximately 40 cents a day!
FYI: our typical water backup claim is between $5000 and $10,000. Finished basements can tend to be higher.
What does the water backup endorsement provide at claim time?
Here’s a list of what the water backup endorsement provides at claim time:
- Cost of water extraction- this could be for a plumber or a professional company such as Servicemaster or Servpro. It could even be expenses you incur yourself- such as buying Shop-Vacs to suck up the water.
- Cost to dry out personal property or the structure itself. Pro Tip: Keep in mind that besides fire, water is the worst thing to happen to a house. If not properly dried out, mold, mildew and rot can easily develop (and most homeowners policies have limits on these for future claims!). If the water damage is severe enough, then we recommend using a professional fire & water restoration company (like a Servicemaster, Servpro, etc.) to do the extraction. They have high-tech equipment that actually can measure the amount of moisture in walls, so the chances for mold or mildew is SIGNIFICANTLY reduced.
- Cost to repair or replace damaged personal property. If using a professional restoration company, this often means packing up your damaged personal property and taking it to their location to “dry out” and hopefully salvage. You would be amazed what can be aved provided it’s retrieved in a timely fashion.
- Cost to repair or replace structure damage- flooring and drywall are two of the biggest items, especially with finished basements.
You can quickly see that the water backup endorsement not only covers cleanup costs, but also fixes what was damaged.
What is Flood?
According to FEMA and the National Flood Insurance Program, the textbook definition is as follows:
- A general and temporary condition of partial or complete inundation of 2 or more acres of normally dry land area or of 2 or more properties (at least 1 of which is the policyholder’s property) from:
- Overflow of inland or tidal waters; or
- Unusual and rapid accumulation or runoff of surface waters from any source; or
- Mudflow; or
- Collapse or subsidence of land along the shore of a lake or similar body of water as a result of erosion or undermining caused by waves or currents of water exceeding anticipated cyclical levels that result in a flood as defined above.
Here’s a typical example in our area: rain falls quickly and heavily and the ground is simply not able to absorb the water. It travels along the ground and drains into lower levels of a house, such as a basement. NOTE: these were most of the calls we received after recent flooding.
Flood is a common homeowners insurance exclusion on Ohio homeowners policies with NO buy back available. There may be a handful of companies that offer a limited flood endorsement, but those are few and far between.
To get full blown flood coverage for your home, you must buy a flood insurance policy. Period. Although we do not sell flood insurance, you CAN contact the National Flood Insurance Program help center at 800-427-4661 for a referral in your area.
For additional resources regarding flood insurance, visit FEMA | National Flood Insurance Program (including FAQ, definitions and how policies are rated).
Additional Insurance Solutions
We DO have access to a limited Inland Flood coverage through two of our companies that covers typical flood damage, such as damage to a residence, personal property (including property in a basement), loss of use and debris removal (subject to property eligibility). It is an endorsement on the homeowners insurance policy. You must have Water Backup coverage to have the Inland Flood endorsement, and the coverage limit and deductibles must match. The idea is to provide coverage where Water Backup does not. Again, this is not flood insurance, but something to help fill the gap.
Here’s a great example of when the Inland Flood coverage would apply: A creek behind a home overflows and water enters the basement through the windows. The sump pump cannot handle the water, so the basement fills with water. Again, these were typical calls we received after recent flooding. Why doesn’t water backup apply here? Because the reason the incident happened at all is the creek overflowing.
By now, you should begin to see there ARE drastic differences between water backup and flood. The most common appears to be that water backup comes from underneath and travels upward, whereas flood is along the surface of the ground and travels across.