Water Damage: What Insurance Companies Want You to Know

Whether it’s a burst pipe, a leaky roof, or a malfunctioning dishwasher, at some point, most homeowners find themselves dealing with water damage.

Most homeowner’s insurance policies offer some sort of coverage for water damage. But what does your insurance company want you to know about this common household issue?

A recent article from realtor.com outlined some of the top things insurance companies want homeowners to know about water damage, including:

• Water damage is extremely common… Insurance companies get all sorts of claims—but according to the article, claims related to water damage are more common than most. For example, one of the insurance professionals featured in the article said that about 50% of the claims homeowners filed with their company in 2021 were related to water damage.
• …and it can get expensive. Water damage may be common—but it can also be expensive. According to the article, the average cost to repair water damage ranges from $1200 on the lower end of the spectrum to a whopping $5000 on the higher end.
• There are ways to prevent water damage. As a homeowner, there are steps you can take to prevent water damage—and avoid the hefty price tag that goes along with it. To avoid roof leaks, make sure to regularly inspect and clean your roof—as well as clean your gutters. To avoid frozen pipes, make sure to keep your thermostat above 65 degrees during the winter months. And If you have appliances that use water (like a washing machine or dishwasher), make sure to get them regularly serviced.

Most homeowners insurance policies cover sudden and accidental water damage. That includes any damage done to your home’s structure, personal belongings, and other structures on the property. But when an accident occurs—like a burst pipe or a leaking dishwasher—homeowners want to know exactly how much their insurance company is going to help them out. If you ever find yourself in this stressful (but all too familiar) situation, there are some key things you should know in regard to home insurance and the things that it covers.

1. Your home insurance covers certain types of water damage

Flooding from storms requires separate flood insurance, but water damage caused by plumbing failures are the type of claims homeowners can file through their regular home insurance policy.

Apart from plumbing problems, common water damage claims include issues that happen during colder months such as frozen pipes and pipe bursts from improper insulation.

“Owners of older homes tend to file more claims due to dated building materials,” says Jason Metzger, senior vice president and head of underwriting and risk management at PURE Insurance. “For example, homes with rubber hoses and plastic connectors are at greater risk because these hoses can wear down over time, leak, and cause immense damage to the home.”

Steel braided water supply and metal connector lines are more resilient, Metzger says, “but even the highest-grade materials will wear over time, so replacing them at regular intervals is important.”

2. How to correctly file a claim

If your home experiences water damage, you’re going to be eager to file a claim with your insurance company. Most insurance companies have a 24/7 hotline to help members through the claims process and cleanup. But before contacting your insurance company, experts recommend immediately turning off the water at the source to avoid further damage.

“Contact your insurance company as soon as the damage is discovered as they may have preferred mitigation service providers who can assist in mitigating the damage,” says Metzger. “Take photographs and videos to document the damage.”

After reporting your claim, an adjuster will discuss the situation with the homeowner and make arrangements to assess the damage. Once the evaluation is complete, the adjuster will provide a written estimate of the cost to repair the damage, including labor and materials.

3. How to get insurance to pay for water damage

Whether or not coverage can be applied to the damage in your home depends on the source of the damage. Refer to your specific homeowners insurance policy, and contact your insurance broker to see what your insurance company is going to pay for the repairs.

Negotiation for small claims may not be an issue, but larger projects can pose challenges in getting your insurance adjuster and contractor aligned, says Paul West, private risk adviser for Cavallo & Signoriello insurance agency.

“Here’s where your independent insurance agent can also be a resource,” says West. “If you don’t have the stomach for haggling over what constitutes like-kind replacement materials, ask your agent to play middleman. He or she has more experience with this process and probably knows how to frame the case you’re trying to make.”

4. Cost of water damage

The national average cost to repair water damage in a home is $1,200 to $5,000, with the average homeowner shelling out $3,000 for standard greywater extraction with drying and drywall and ceiling repairs in a bathroom, according to Fixr.com.

Water damage claims are also extremely common.

In 2021, about 50% of all claims made by homeowners covered by Metzger’s company were caused by water damage.

5. How homeowners can prevent water damage

Homeowners can lower their chances of having to deal with water damage if they take proactive measures in their home.

“Ensure your appliances are outfitted with high-quality, resilient materials and that all areas where water is transported are properly maintained and upgraded when necessary,” says Metzger.

Appliances such as your dishwasher and washing machine should be regularly serviced according to the manufacturer’s instructions.

One common type of water damage, roof leaks, can be avoided by regularly inspecting and cleaning your roof and clearing debris out of your gutters.

Bathroom leaks, another type of water damage, are typically caused by tree roots that have grown into the pipes. While an intrusion like that is hard to prevent, you can be proactive by not putting anything down the toilet or sink that doesn’t belong and by calling a plumber at the first sight of an issue.

It’s important to always turn off water systems while you’re away for extended periods of time, Metzger says, and to maintain an interior temperature of at least 65 degrees Fahrenheit during colder months (or a minimum of 50 degrees if you’re out for an extended period of time).

Bottom line: Water damage is extremely common. Ensure your homeowner's policy has the correct and adequate coverage you desire. Its not a bad idea to re-evalute your insurance needs and shop around every couple years. Don't forget to ask questions! Once you know you're happy with your coverage, make sure you are taking the appropriate steps to maintain and protect your home.