Do I Really Need That Coverage?
67 percent of homeowners believe that water damage from a sewer or sump-pump back up
would be covered by their standard homeowner’s policy. In reality, without the appropriate rider,
most policies don’t cover rising water losses
Rising water losses are most often caused by sewer or drain back-ups, sump pump failure, toilet or septic systems overflows, etc. These are especially challenging for two reasons:
The first is that these are what we call Category 3 or black water losses. This means the water may be contaminated by human and/or animal waste and is likely teeming with thousands of disease causing viruses, bacteria, and protozoa and can cause very serious illnesses if not treated properly.
The second is that rising water coverage is almost never a part of a standard homeowner's policy and if a rider was not written to include it, the policyholder will not be covered for the loss as they would have been for a "falling water" loss from a failed appliance, broken pipe, etc.
What makes this coverage gap so impactful is that most homeowners think they are covered for these losses and end up extremely upset when they find out they are not.
Rising Water Losses Are Much More Hazardous
Because black water losses are so dangerous to the health and safety of building occupants, they must be restored to a higher Standard of Care according to the ANSI-Approved IICRC S500 and S520 standards. Anything less can result in serious and even fatal illnesses to occupants as well as significant diminishment of the property’s value.
The Standard of Care is Much Higher
Other than catastrophic flood damage, rising water losses are the most challenging we face as restorers. The Standard of Care requires more removal and replacement of affected items such as carpet, pad, drywall and insulation and contents than other water losses. This means that these losses are going to cost more to restore due to the increased reconstruction required to remove and replace affected materials.
What Happens When We Arrive on an Uncovered Rising Water Loss?
At the very least we encounter a very distressed policyholder who almost always thinks they are covered. They are relieved that help has arrived until they find out that, in fact, they are not covered. As you might imagine, this is a hugely negative “Moment of Truth”.
When there is no coverage the homeowner has two choices; pay out of pocket or try to do it themselves. This is a very difficult choice because if the homeowner can’t afford to pay for the restoration they most certainly do not have the required training, equipment, disinfectant treatments, knowledge of proper procedures, protective equipment, etc. to perform a proper restoration.
An improper restoration can lead to serious health and safety issues for the building occupants as well as dramatically and negatively affect the property’s value.
What Should You Do To Make Sure You Are Covered For A Rising Water Loss?
Unfortunately, things these days are very expensive and has property owners we find ourselves searching for the absolute best price on our homeowner's coverage. Unfortunately, when we make decisions on price and price alone we could be missing key coverages.
To ensure that you are properly covered you should at the very least review your policy documents to determine if you have the proper coverage for rising water. If you do not understand the policy documents (they can be super confusing) then contact your insurance agent and ask. Your agent in most cases will be very happy to talk to you about your policy and make recommendations as to the additional coverages that you should have on your policy.
We can tell you from experience, that we have never had a client tell us they were happy they did not have the additional coverage and their loss has been declined.