A homeowners policy may help keep your head above water

December 11, 2013

Then again, maybe it won’t. What’s your policy?

  POSTAGE  by Rob Stamp

It’s been drilled into us since we were young sprouts. Honesty is the best policy. Seeing how I make a living in a position of trust, I’d be a damned fool to dispute that. Instead, this little exercise is to point out that the second-best policy could very well be your homeowners policy. That may be especially true if you’ve purchased — and needed — optional water backup coverage.

Under all homeowners policies, there’s little to no coverage for water damage. It’s just something insurance companies have never intended to cover and, in this age of higher deductibles and coverage restrictions, it’s safe to say they never will. Smart people do what they can, so what they can do is pay a little extra for coverage for damage caused by water backup of sewers and drains. How much extra? It varies by company, but I’d say $40 to $50 a year for $5,000 of coverage is a fair estimate. Today’s cost for proper cleanup and mold remediation suggests that even that may not be enough. Those with finished basements surely ought to consider higher amounts.

Some friends from nearby Expert Response Restoration recently passed along some rather startling information regarding levels of water contamination that nearly made me ship my pants (off to the cleaners).

  • Category 1  This water originates from a clean or sanitary source such as a broken clean water supply line, a toilet tank or bowl, a faucet, a failed water heater, etc. Although the water may originate from a clean source, Category 1 water can quickly degrade into Category 2 or Category 3, depending upon such factors as time and contact with contaminants.
  • Category 2  This is water with some level of contaminants that could cause discomfort or illness if ingested. Category 2 water can come from washing machine overflow, toilet overflow with some urine but no feces, dishwasher overflow, etc. Category 2 water can also quickly degrade into Category 3, depending upon such factors as time and contact with contaminants.
  • Category 3  This water is grossly unsanitary and could cause severe illness or even death if ingested. Sources of Category 3 water include sewer backups, flooding from rivers or streams, wind-driven rain, water from beyond the toilet traps (regardless of visible content or color), water from the toilet bowl with feces, standing water that has begun to support microbial growth (mold), etc.

In other words, water accumulation somewhere in your house is something to be dealt with swiftly and, to borrow a phrase, with extreme prejudice. Expert Response, and others in the restoration business, consider it an explosive situation, using T ‘n’ T as a buzzword of sorts. T ‘n’ T refers to time and temperature. These two elements, without airflow present, can be extremely volatile, as they can potentially transform a Category 1 water loss into a Category 2 or 3. Responding to water emergencies as quickly as possible reduces the chances of category degradation, secondary damage and mold growth.

Broadly speaking, there is never coverage for a leaky basement. The homeowners policy isn’t worth the paper its printed on when it comes to providing coverage for cracks in the foundation. Sub-surface water damage is excluded. For example, if a swimming pool or sprinkler system leaks underground and causes water to seep through the foundation, there is no coverage. However, optional water backup endorsements will often provide coverage for damage caused by water that escapes, overflows or discharges from a sump pump, sump well or any other system designed to remove water from around the foundation.

What else is never covered by homeowners? Flooding is the most common excluded coverage. Whether the result of a river overflowing its banks or a dam breaking, water damage caused by surface water entering the house is simply not covered. An overflow originating off-premises is not covered, either. This could include a sewer line breaking in the street and causing water to flow over the surface into the house. Faulty plumbing wouldn’t be covered. That poor homeowner who hired the Three Stooges as plumbers was left holding the bag (a rather wet one, at that) for all the damage those imbeciles caused. Can you count on the insurance company covering something solely out of the kindness of its heart? I didn’t think so.

Of course, it wouldn’t be a very insurance-like without issuing the standard disclaimer, referring you to the actual terms, conditions and exclusions found only in the policy itself.