The short answer is: "It Depends!"
Damage can result from water in a number of ways. In the past few weeks, southeast Michigan has been inundated with storms that have delivered unusually large amounts of rain. Some areas received 6" on August 11, 2014. Another storm came with heavy rain and high winds on September 5, 2014, and more heavy rain fell today. Many homes and businesses suffered damage from water.
The question that determines whether or not your homeowner policy or business policy might provide coverage is: Where did the water come from?
Many homes in our area suffered flood water entering the home or building. Some even to the extent that it caused basement walls to cave in. If exterior surface water enters the home or building there is NO COVERAGE offered by the homeowner or business policy. This is considered FLOOD and damage caused by flood is not covered. And, the exclusion is very broad. Any exterior water, no matter where it comes from or how it gets into the structure is NOT COVERED. Examples of excluded causes of water loss include things like the accumulation of rain water from a storm, storm surge during a hurricane, overflow of a river or lake, failure of a dam or levee. It doesn't matter if the incident that caused the water to flow into the home or building - weather, structural failure or human failure...it is NOT COVERED. The only place to purchase insurance that will insure against flood damage is a Flood Insurance Policy backed by the National Flood Insurance Program (NFIP). Even then, the scope of coverage is limited. Personal property in sub-surface areas, such as a basement, are not covered...only the structure and items that are part of the home such as a furnace or hot water heater.
Many other homes suffered loss because water backed up through sewers and drains. Sewer backup or sump pump failure is treated different from FLOOD. Most business and homeowner policies offer the option of adding coverage for loss resulting from sewer backup or failure of a sump pump. Available coverage amounts vary by insurance company and type of policy, but typical limits can range from $5,000 to $25,000 on homeowner policies and as much as $50,000 on some business policies. This would be a good time to review that you know whether or not this option is included in your policy.
Depending on the type of insurance you have, some other forms of water damage may be covered by home and business policies. Examples of water damage that are most often covered include broken water pipes, overflow of a toilet, sink or bathtub, or interior damage caused by a roof leak.
It is very important to understand the different ways that water can cause damage and how YOUR insurance will respond. Call us at 800-220-5582 to review your policy or click below for more information.