Flood Insurance vs. Water Back-Up Coverage

The Difference Between Flood Insurance And Water Backup Coverage

Picture this: you leave for vacation and, after a wonderful time with rest and relaxation, you bring your dirty laundry down to the basement only to discover you are knee-deep in standing water. Later, you discover that a frozen pipe burst and filled the basement. Your basement is now flooded but does your Homeowners Insurance cover the damage?

If you have Flood Insurance, what does that cover?

What if there is sewage backed-up in your basement? Do you have to clean up that mess yourself or does insurance cover the damage and clean-up?

If you find you’re unsure, please read below.


Most Homeowners Policies would cover damage caused by frozen pipes but not to the pipe itself. Water damage such as plumbing leaks and other damage caused by the overflow or accidental discharge of water or steam from a drain or pipe that is not on the residence premises are covered. Damage caused by water or steam from a plumbing, heating, air-conditioning, or automatic fire extinguishing system is also covered; however, the defective or leaky plumbing, system, or appliance is not covered.

What is flood? According to FEMA, flood is defined as:

A general and temporary condition of partial or complete inundation of 2 or more acres of normally dry land area or of 2 or more properties (one of which is the policyholder’s) from:

  • Overflow of inland or tidal waters; or
  • Unusual and rapid accumulation or runoff of surface waters from any source; or
  • Mudflow; or

A collapse or subsidence of land along the shore of a lake or similar body of water because of erosion or undermining caused by waves or currents of water exceeding anticipated cyclical levels that results in a flood as defined above.

According to the Insurance Information Institute, during a 2016 poll, only 12 percent of U.S. homeowners have Flood insurance. Is the gap due, in part, to the lack of knowledge or do homeowners believe they are already covered under their homeowner’s policies? Homes in moderate to low-risk regions are still likely to have a claim for flood damage. According to The Federal Emergency Management Agency (FEMA), all 50 states have experienced floods or flash floods in the past five years and 20 percent of those claims come from moderate to low-risk areas.

Do you know the difference between Flood Insurance and Water Backup Coverage?

Homeowners insurance doesn’t typically cover damage caused by flooding though you may be able to purchase separate flood insurance directly through the federal government’s National Flood Insurance Program, also known as the NFIP, or through an insurance broker that writes flood insurance with the NFIP.

Flood insurance provides limited, if at all, coverage for rooms such as crawlspaces and basements and their contents according to the NFIP. Items in these spaces, like a furnace, are usually covered under building coverage. Others, like a washer and dryer, are usually covered under personal contents coverage. Some items, like personal effects, may not be covered at all when kept in these below-ground rooms.

  1. It may help protect: The physical structure and foundation of your home; plumbing and electrical systems; central air and heating systems; attached structures such as cabinets, bookcases and paneling; and a detached garage. Other detached structures typically need their own policy.
  2. How it usually pays: Replacement cost for a primary residence and actual cash value for a vacation home, if you cover your home at the required limits which are usually $100,000 coverage on contents and $250,000 in building coverage. Replacement cost is the cost to replace at today’s value whereas Actual Cash Value takes depreciation into account.
  1. It may help protect: clothing, furniture and electronics; curtains; some portable appliances; freezers and the foods within them; and certain valuables like art, up to a specified limit.
  2. How it usually pays: Actual cash value basis.
  • Moisture or mold/mildew damage that “could have been avoided by the homeowner by taking swift action”
  • Currency, precious metals, and paper valuables like stock certificates
  • Outdoor property such as decks, fences, patios, landscaping, wells and septic systems, and hot tubs and pools.
  • Living expenses, like temporary housing (if flood damage deems your home uninhabitable)
  • Cars and other self-propelled vehicles (but your auto insurance may offer some coverage for your car)

Regarding water backup from an outside sewer or drain, this coverage can be added to your existing homeowner’s policy. Most homeowner’s do not realize they are responsible for the maintenance and repairs of their house or sewer lateral which is the pipeline between the city sanitary sewer main and the building. There are several common causes of sewer backups according to the Civil Engineering Research Foundation.

  • Aging sewer systems. According to The American Society of Civil Engineers, the nation’s 500,000- plus miles of sewer lines are over thirty years old on average.
  • Combined Pipelines-Pipes that combine storm water and raw sewage into the same pipeline are exposed to more volume than they can handle during rain storms. This is what causes raw sewage to spew into basements and other low-lying drains.
  • Tree roots – Small roots of trees and shrubs make their way into sewer line cracks and service pipe joints as they seek moisture and cause more damage as they grow. The owner of the problem tree is responsible and, when the issue arises from a combination of city and private trees, the costs are sometimes split.
  • Sanitary Main Blockages – If there is a blockage in the main line, sewage can back up into homes and businesses through floor drains. Thankfully, this usually happens slowly giving homeowners enough time to fix the problem before it worsens.
  • Most water damage if the cause is sudden and accidental. According to the insurance information institute, you’ll likely be covered if something such as your drywall becoming drenched after your water heater bursts or a pipe ruptures and saturates the ceiling below.
  • Damage caused by neglect (unresolved maintenance issues)
  • Replacing or repairing the source of the water damage such as a water furnace or burst pipe.
  • Water backup from an outside sewer or drain though you can typically purchase sewer or water backup coverage as an extra coverage on your homeowner’s policy to protect against this type of damage.
  • Flood; no coverage is offered for flood damage no matter the source of water. Flooding can occur from storms, over saturated ground, overflowing or surging bodies of water like rivers, ponds, lakes and oceans.
  • Properly dispose of grease by disposing of it once it cools and throw it out. When pouring it down the drain, it will harden as it cools and block the drain, the property line, or main city line.
  • Properly dispose of paper products that do not deteriorate quickly such as paper towels, disposable and cloth diapers, hygienic wipes, feminine products, etc.
  • Periodically cut tree roots if you continue to have problems with overgrowing.
  • Replace your line with new plastic pipes that prevent tree roots from entering your line.
  • Correct illegal plumbing connections such as French drains, sump pumps, and other flood control systems that are connected to your sanitary sewer.
  • Install a backwater prevention valve in the basement of your home or business to prevent backflows.
  • Wet-vacuum and/or remove spillage
  • Mop floors and wipe walls with soap and disinfectant
  • Flush out and disinfect plumbing fixtures
  • Steam clean or rem wet carpets or drapes
  • Repair or remove damaged wallboard or wall covering
  • Cleanup ducts

Buy Flood Insurance even if you are in a low to moderate-risk zone. Costs tend to be low in these areas and are well-worth the cost for peace of mind. If you have a particularly high-value home, you can purchase excess flood insurance coverage to supplement your primary policy’s limits.

Check with your insurance agent or provider to determine what your homeowner’s policy covers and ask how your policy will respond to a water damage coverage claim. Ensure you add water backup coverage to your policy if you don’t already have it.


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