To those living in the Northeast, Hurricane Lee was a painful reminder of just how damaging water can be to property. But it is not just natural disasters; water leaks caused by plumbing problems can pose a huge risk of property loss. A review of your insurance coverage should include problems caused by water damage.
Most homeowners insurance will cover damage from leaks that include the cost of repairs minus any deductible. However, there is usually no recourse if you need to live elsewhere during the repairs. If you keep valuable collections such as artwork or antiques, these may not be covered if they are damaged by the leak. Anyone keeping valuable collections should consider installing an alarm system that can automatically detect leaks and shut off the water supply. Insurance industry statistics show that these systems can prevent or minimize up to 93% of the cost of water damage.
Another potential source of water damage is from water backup from sewers and drains. Hurricane Lee caused many basements to flood when the ground became saturated. Some policies will cover the cost of repairs when the sump pump stops working. Sewer and drain backups can be easily prevented or minimized. The key is to install a properly sized sump pump with backup power supplied by a battery or a stand-by generator.
Here are a few items to look for when reviewing your coverage:
- Damage due to sewer and drain backup: Most policies do not provide coverage unless a special endorsement has been added. Be sure to check if there is a limit on the endorsement.
- Unlimited loss of use during extended repair work: The best policies have no limit on covering the additional cost of living elsewhere in comparable style.
- Replacement cost for contents: Standard industry policies apply depreciation to rugs, furniture, and other contents of the home when damaged. The best policies will compensate the owner for buying new replacements.
- Cost of installing a loss prevention device to prevent water losses: The best policies will often provide this type of coverage to help prevent losses from recurring. Standard policies may not.