What types of damage does the typical insurance policy cover?
The two most common types of insurance policies for homeowners in Florida are HO-3 and DP-3 policies, known as "all risk" insurance policies. These types of insurance policies usually cover all sudden and accidental damage, and then reduce that coverage through various exclusions. All-risk insurance policies normally cover water damage caused by plumbing leaks, and access to repair the damaged plumbing.
Some HO-3 and DP-3 policies and some insurance companies have exclusions for all types of water damage, including plumbing leaks, or may have a cap on plumbing leaks with a special limit of liability, usually $5,000 or $10,000. For the purposes of this article, we are assuming these caps or exclusions are not in place.
A less common insurance policy in Florida, even though it's often not much cheaper, is an HO-8 policy, which works in the opposite way of an all-risk policy. An HO-8 policy is often referred to as a "named perils" policy. Instead of starting with all sudden and accidental, or "fortuitous" losses, an HO-8 policy starts with no coverage and adds in only certain named perils, usually wind and hail, civil commotion and riot, smoke, aircraft, vehicles, volcano, explosion, vandalism and theft. Those losses are then even further excluded. This type of policy also does not cover plumbing leaks, at all.
So where does that leave us with our water damage? What's a back up? What's an overflow? What's a leak? What's a flood? Which of them do my insurance policy cover if I have water damage?
Water damage caused by "back ups"
My toilet backed up and disgusting water is everywhere causing damage. Surely that's a "back up," right? Nope! A leak from your toilet is actually covered under an all-risk policy, whether there was a plumbing break or failure, or even if you just had a clog.
The language that excludes a "back up" in an insurance policy often reads "We [the insurance company] do not cover water damage caused by water which backs up through sewers or drains..."
Well, what about if water backs up from the drain in my sink or tub? Surely THAT is a "back up" then? Nope, wrong again.
Florida's courts, in analyzing the language of insurance policy have held that back ups of sewers or drains are damages caused by water that has backed up from a leak originating off the property. The sewer is the ultimate destination of water that leaves your property, so a failure of plumbing off the property, or water coming from the actual sewer is a "back up" that wouldn't be covered under the insurance policy. The same goes for drains. A storm drain in the street would be a "drain" under your insurance policy, or perhaps, a drainage ditch would be a drain that would be excluded.
Otherwise, your insurance policy is meant to cover losses caused by water accidentally escaping from plumbing systems and appliances in your home, without distinguishing whether that water is coming or going.
Water damage caused by an "overflow"
Along the same lines of water damage caused by a back up is water damage caused by an overflow. Overflows are often referenced in an insurance policy as water which overflows from a sump pump. If you have a pump meant to keep water out of your home and it is overpowered or overwhelmed, then water will have been deemed to "overflow." The same would hold true for exterior drains. If they've overflowed and result in water that ends up in your house, that would normally be excluded under your insurance policy.
An overflow is not, however, when water escapes from your toilet, your sink, or your tub. These are plumbing leaks and would be covered under a standard all-risk policy.
Water damage caused by a "leak"
Plumbing leaks are a bit of a catch-all coverage under your all-risk insurance policy, because they are sudden and accidental leaks. Air conditioner and HVAC leaks are covered like this, as well. Depending on the insurance company, some all-risk policies in Florida still cover roof leaks as well.
The provisions in the insurance policy often exclude repair to the system or appliance the water escaped from, meaning the repair to the plumbing, HVAC or roof is usually not covered, unless it was also damaged by a covered loss. If it failed because of old age, the system isn't covered, but if the roof was damaged by a hurricane, it is covered. The water, then, is what's often referred to as an "ensuing loss."
The all-risk policies that don't cover roof leaks have language that says something like it excludes damage caused by rain "unless the exterior of the building" is first damaged by either a "covered peril," or sometimes more narrowly and specifically by wind or hail.
Water damage caused by a "flood"
This is the term that trips up most homeowners. "My house was flooded." "I came home to a flood." Flood is not covered by standard homeowners insurance policies because "flood" is a very specific term for water, outside the home, on the ground covering more than a certain area of land. A rising river is a flood. Storm surge is a flood. Abnormally high tide is a flood. Rain water in a low lying area is a flood. The rain storm that carried Noah's ark was a flood.
An air conditioner leak is not a flood. A plumbing leak is not a flood. A roof leak is not a flood.
Because of this difference, and some further limiting language in insurance policies, pretty much any water on the ground outside the home is not covered. An abnormally wet ground from heavy rains that exerts pressure on a foundation, or poor drainage are not covered.
Flood insurance is usually a separate policy under the National Flood Insurance Program, administered by FEMA and the Federal Government.
If you've found yourself with water causing damage to your home in Tequesta, Jupiter, Hobe Sound, or anywhere else in Florida's Treasure Coast or Space Coast, it's best to consult with an experienced public adjuster like VIP Adjusting before your insurance company tries to trip you up in a recorded statement. Call today or contact us for a free claim evaluation.
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