Is water damage covered by my homeowners insurance policy?

Homeowners insurance covers losses to your property and outbuildings, but policies don't necessarily pay to repair or replace property damaged from all types of losses. There are limitations and restrictions on coverage.

It can be confusing to determine exactly what type of losses your policy protects against. It's especially important to understand your homeowner's insurance coverage — especially when it comes to something like coverage for water damage.

That's because damage from water is a common problem homeowners face and it can cause other problems, such as mold damage, that can be expensive to fix. And coverage for losses depends on the policy terms as well as the circumstances under which the damage occurs.

To make sure you have the right coverage for your needs, read your home insurance policy carefully, including the fine print. And always shop around and compare home insurance policies from different insurers. You can visit Credible to explore your home insurance options to find the comprehensive coverage that's right for you.

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There are different categories of homeowners insurance

Not all home insurance is created equal. When you're trying to determine if water damage is covered by homeowners insurance, you need to know whether you have a named peril policy or an open peril policy.

A named peril policy provides insurance coverage only if a specific named danger occurs and causes losses. For example, your policy may specify that it covers damage from fire, hail or theft. If your water damage wasn't caused by a named peril, it wouldn't be covered.

An open peril policy, on the other hand, would provide coverage for damage from any cause except for those specifically excluded. If you have open peril coverage, your water damage would be covered by your insurer unless the specific cause of it was mentioned as an exclusion in your insurance policy.

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When is water damage covered?

If you have a named peril policy, water damage is covered provided it occurred as a direct result of a covered event. For example, it's common for named peril policies to cover a windstorm or hail. If a storm results in damage to your roof that allows water to penetrate, chances are good the damage would be covered.

If you have an open peril policy, water damage is covered unless it occurred as a direct result of an excluded event. For example, if water damage occurred due to a broken refrigerator water line, the damage would be covered unless your insurance policy contract said that broken refrigerator lines were not a covered peril.

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When is water damage not covered?

Water damage isn't covered if your open peril policy excludes it. If you have a named peril policy and the damage occurs from an event that's not listed as being covered, then your insurer also wouldn't pay for your damage.

Most named peril policies do not include flood damage, and most open peril policies also exclude flood damage. As a result, if your property is damaged due to a flood, it's very likely your insurer won't pay for the harm the rising water caused. That's why many people end up purchasing separate flood insurance policies.

It's important to understand when water damage isn't covered so you can decide if you need separate coverage to protect against that type of damage. You should also look for an insurer offering comprehensive coverage for most types of water damage if this is a concern for you.

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What to know about filing an insurance claim

When covered damage occurs, whether it's caused by water or any other problem, it's important to document it carefully and to reach out to your insurer right away. Your insurance company will provide guidance on the steps involved in the process of filing water damage claims for reimbursement for losses.

Filing damage claims is easier if your insurer has a solid reputation for customer service, so you should shop carefully to find high-quality standard homeowners insurers.

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