From leaky roofs to floods, your home may face risk from various types of water damage. Unfortunately, your homeowners insurance may not cover all of them. This is where the Water Backup Insurance comes in. Water backup insurance is a type of coverage that protects against damage caused by water entering your home from a drain, sewer, or sump pump failure.
Standard homeowner insurance does not cover damage from water backup, so you will have to purchase an additional policy. Or have an endorsement to get this special coverage. Read this blog post to the very end to learn what water backup insurance is. You will also know how much it costs and whether you need it.
What Is Water Backup Insurance?
Water backup insurance, also known as sewer backup insurance, is an optional coverage you can add to your homeowners insurance. It helps protect against water damage from a sewer or drain backup or a sump pump failure. These issues can arise from aging sewer systems, tree roots invading sewer lines, combined stormwater and sewage pipelines, and blocked sanitary mains.
With aging wastewater systems, water backups may become more frequent. The average age of water and wastewater pipes in the U.S. is around 45 years, per the American Society of Civil Engineers. Since homeowners insurance typically doesn’t cover these incidents, you can include water backup coverage in your policy through an endorsement or rider.
Water backup coverage can help minimize your financial losses, but it comes with specific limits. It typically covers damage up to a certain amount, often between $5,000 and $7,000. Additionally, there may be a separate deductible for water backup claims, distinct from your regular deductible. This deductible usually ranges from $500 to $1,000.
What is Covered by this Insurance?
This coverage applies when there is a backup sewer or drain or your sump pump fails. It also helps to pay for repairs and replacements to the structure of your home when damage is caused by backups. Additionally, it pays for any damage caused to your personal property by the backup as well as water removal. Note: For this coverage to apply, the backup must have been caused by a peril that is covered. Some of the perils that may be covered by water backup coverage may include:
- Tree root growth is breaking your sewer line.
- Sump pump overflows
- Damaged or old sewers and drains
- City pipeline blockage
- Home gutter system backup
When water backups and overflows happen, they can lead to unsanitary conditions. This coverage helps pay for removing standing water, replacing damaged belongings, repairing your home, and eliminating any mold growth caused by the overflow. It also provides loss-of-use coverage, ensuring you have a place to stay if your home is temporarily uninhabitable.
What does Water Backup Coverage not Include?
This coverage can shield you from some damage, but it has limitations. Here are instances when water backup insurance might not apply:
- Flooding: This coverage focuses on damage from sewer or drain backups, not flooding from external sources like storms. To protect against flooding, you’ll need separate flood insurance.
- Broken sump pump: Water backup insurance won’t replace a malfunctioning sump pump. An equipment breakdown endorsement is required for this; otherwise, you’ll likely need to pay for repairs yourself.
- Wear and tear: Neglecting regular maintenance on your drains or sump pump can void coverage for backups caused by these issues.
Ensure that you understand the policy very well before adding it to your homeowner’s insurance. You need to know what it includes and what it does not.
How Much Does Water Backup Coverage Cost?
The cost of water backup coverage typically falls between $30 and $250 annually. The price you pay is influenced by several factors. The amount of coverage you choose plays a role; more coverage usually means higher premiums. For example, $5,000 in water backup coverage costs less than $25,000 in coverage.
Your risk level can also affect your premiums. Insurance companies assess your risk when setting premiums. If they think you’re likely to file a claim, your policy may be more expensive. Your credit-based insurance score may also factor into this assessment.
Additionally, your deductible—what you pay before insurance kicks in—can impact your premium. Generally, higher deductibles lead to lower premiums. However, remember that you would need to pay this amount out of pocket if you experienced a water backup.
When Should I Consider Water Backup Coverage?
There are a few scenarios when water backup coverage might be beneficial. If you live in a region prone to heavy rainfall, your sump pump may face extra strain and be more susceptible to problems. Protecting against potential backups can be a wise choice in such circumstances.
Another reason to consider water backup coverage is if your sump pump is old. Proper maintenance is essential to ensuring your claim is honored, so take care of your pump even if it shows its age. Even if these specific situations don’t apply to you, water backup coverage remains worth considering. Given the potential for sewer backups and the aging infrastructure in the U.S., along with the affordable cost of this coverage, It’s a sensible addition to safeguard your home.
Is it Worth it?
Water backup insurance can be a valuable investment for homeowners, as it provides peace of mind and financial protection against unexpected damage. Sewer or drain backups can cause significant damage to your home. This includes the loss of personal belongings and structural damage. They can also lead to unsanitary conditions and mold growth. Water backup insurance helps cover the costs of cleanup, repairs, and replacements, as well as temporary housing if your home becomes uninhabitable.
Although the annual premium may vary depending on your level of coverage and risk factors, the benefits of having this protection can far outweigh the costs, especially if you live in an area prone to heavy rain or aging infrastructure. Ultimately, this insurance can save you from costly out-of-pocket expenses and provide a safety net during stressful situations.