Homeowners Insurance and Water Backup Coverage Options That Could Save You Money

Water Backup claims is the most common type of homeowners insurance claim that we see daily. Most people don’t know what their water backup limits are and most likely, they are currently not carrying any coverage or they are drastically underinsured. Let’s dive into what water backup coverage is and how to determine how much coverage you need to carry to be properly covered.

Water backup, also called backup of sewers and drains, provides coverage if water comes BACK into your home from a drain tile, toilet, sump pump, etc. The most common occurrence of when this coverage is applicable is when an insured’s sump pump fails or dies. When this happens, you have a set limit on your policy for the amount of coverage that you have to clean up and extract the water AND to replace/repair the damage that was done. This coverage is different than your coverage A, or dwelling amount! If you don’t specifically have water backup coverage listed, most likely you will not have any coverage!

When we are reviewing policies with our insureds, we often hear the question: how much water backup is needed?  This coverage is one that should be assessed often because there are many factors that play into how much coverage is needed.  One of the most important items to think about in regards to this coverage is: what type of basement do I have?  If it is a finished basement with carpet and living space, more coverage is needed.  If the basement is cement floor and block walls, less coverage is needed.  When a basement is finished with carpet and other furnishings, the cost to clean/repair/replace those items from water damage is extremely expensive.  To simply extract water from a home, most restoration company’s START at $5,000.  This is simply to extract water and dry the affected area; this does not include repairing or replacing the damaged areas!

The cost of construction is another reason why it’s important to update your water backup coverage.  The cost of construction is rising drastically right now.  That means that the cost to repair or replace your damaged property costs more currently than it has in the past.  It may have made sense to carry $5,000 worth of coverage prior; currently, that same $5,000 might not even cover the cost to dry your basement from a claim, let alone repair the damages!

Everybody’s situation is different when it comes to coverage.  What is good for one person, might not be good for others.  If you have coverage questions regarding how much water backup coverage you have, give us a call and we can help!