This guide is general information, not insurance or legal advice. Coverage, prices and rules vary by insurer and by state, so read your policy documents and check with your insurer, a licensed agent or your state’s department of insurance before you decide.
Key facts
- Water that comes from the top down, such as burst pipes, wind-driven rain and ice dams, is generally covered by a standard homeowners policy.
- Water that comes from the bottom up, such as an overflowing river or storm surge, is flood damage and requires a separate flood insurance policy.
- Sewer backup is excluded from most standard policies and from flood insurance, but can be added with an endorsement for a modest annual cost.
- Damage from poor maintenance, such as long-term seepage or leaks you ignored, is not covered.
- The NFIP covers flood damage up to $250,000 for the structure and $100,000 for contents, and there is a 30-day waiting period before coverage takes effect.
Water damage is one of the most common and costliest disasters a home can experience, and policies treat different kinds of water in very different ways. A burst pipe and a flooded creek can leave similar wreckage, but one is usually covered by a standard homeowners policy and the other is not. The difference comes down to the source of the water and how suddenly it appeared.
Covered water damage vs. flood damage: the key distinction
A useful rule of thumb: water that comes from the top down is generally covered by a standard homeowners policy, while water that comes from the bottom up is treated as flood damage and requires a separate flood policy.
Standard policies typically cover:
- Burst or frozen pipes
- Wind-driven rain
- Damage from ice dams on your roof
- Accidental discharge or overflow of water from plumbing, heating, air conditioning, sprinkler systems or household appliances
Flood damage, by contrast, is excluded under standard homeowners and renters policies. FEMA and the National Flood Insurance Program (NFIP) define a flood as a general and temporary condition in which two or more acres, or two or more properties, of normally dry land are partially or completely inundated. Flood insurance covers river, lake and coastal overflows, storm surge, water seeping through a dam or levee, and broken water mains.
Common water damage scenarios and how policies treat them
| Scenario | How a standard policy usually treats it |
|---|---|
| Burst or frozen pipe | Covered |
| Wind-driven rain entering the home | Covered |
| Damage from an ice dam on the roof | Covered |
| Water from a burst appliance hose | Covered |
| Overflowing river or storm surge | Excluded; needs flood insurance |
| Sewer or drain backup | Usually excluded; add-on endorsement available |
| Slow seepage or a long-untended leak | Excluded as a maintenance issue |
What is usually excluded: seepage, neglect and sewer backup
Policies are built around sudden and accidental events. Damage that develops gradually, or that reasonable upkeep would have prevented, is generally your responsibility. A standard policy will not cover damage due to lack of maintenance, and that includes mold that follows it.
Slow seepage is a common example. Water in a basement after heavy rain can mean foundation cracks or deteriorated waterproofing, and insurers treat that as a maintenance problem. Homeowners can also be denied a claim if they knew about a leak and left it unfixed, since the policy expects you to take reasonable precautions to protect your home.
Sewer backup is its own gap. Backed-up sewers are messy and are not covered by a typical homeowners policy. They are also not covered by flood insurance, which surprises many people.
Optional coverage: water backup and sump overflow endorsements
Insurers sell sewer backup coverage as a separate product or as an endorsement, sometimes called a rider, to a homeowners or renters policy. It usually costs approximately $50 more per year, though limits vary by insurer. If your home has a sump pump, ask whether an endorsement can cover sump pump overflow as well.
You can also reduce the risk itself. Check appliance hoses every year and replace them every five to seven years, install and maintain a backwater valve that lets sewage flow out but not back in, and make sure the soil around your home slopes so water drains away from the foundation rather than toward it.
Smart tip
If you think you need flood insurance, buy it before storm season. NFIP policies have a 30-day waiting period before coverage takes effect.
What to do when you find water damage
Act quickly, because standing water spreads damage and insurers expect you to limit further loss.
- Stop the water if you safely can. Shut off the main supply or the valve feeding the affected appliance.
- Document everything with photos or video before you clean up.
- Contact your insurer promptly to start a claim and ask what your policy covers.
- Take reasonable steps to protect the home from further damage, such as moving belongings out of the wet area.
Some policies exclude losses that were allowed to worsen through neglect, so it helps to know the requirements in your own policy before you need them. Our guide to what homeowners insurance covers walks through the standard policy in more detail.
Deductibles and how claims are paid
A water damage claim works like most other homeowners claims. You pay your deductible, the fixed amount subtracted from a payout, and the policy pays up to its limits for covered damage. In 2007, water damage including frozen and burst pipes accounted for about 22 percent of homeowners insurance claims, and the average claim was for $5,531, according to the Insurance Information Institute.
How the payout is calculated matters as much as whether the claim is approved. The common HO-3 policy pays for structural damage on a replacement cost basis, meaning what it would cost to rebuild. For contents, some policies pay replacement cost while others pay actual cash value, which subtracts depreciation. Our guide to replacement cost vs. actual cash value explains the difference and what it means for your check.
Flood claims are different. NFIP policies provide replacement cost coverage for the structure but only actual cash value for possessions, and coverage caps out at $250,000 for the home and $100,000 for contents. Private flood policies may offer higher limits.
Because the lines between covered water and excluded water can be blurry, it pays to check your own policy and ask your insurer specific questions. For the other side of this topic, see our flood insurance basics, which explains why homeowners policies exclude floods and how separate flood coverage works.
Questions we hear
Is a burst pipe covered by homeowners insurance?
Yes, generally. Accidental discharge or overflow of water from plumbing, heating, air conditioning or household appliances is among the perils a standard policy covers. The resulting damage is typically covered even though the pipe itself may not be.
Is water from a storm surge covered?
No. Storm surge is treated as flood damage, and standard homeowners policies exclude flood damage. You would need a separate flood policy from the National Flood Insurance Program or a private insurer.
Does flood insurance cover sewer backup?
No. Sewer backups are not covered by a typical homeowners policy or by flood insurance. Backup coverage must be bought as a separate product or added to a homeowners policy as an endorsement.
What counts as a flood?
FEMA and the NFIP define flooding as a general and temporary condition where two or more acres, or two or more properties, of normally dry land are partially or completely inundated by water.