Professional Insurance Programs

Don’t be knee deep in confusion

If you’re frustrated or confused by water damage coverages and insurance, you aren’t alone. Water is one of the most common causes of damage in homes and it represents a large number of insurance claims. A report prepared by Verisk Analytics, a New Jersey-based data analytics and risk assessment firm, found that one in every 50 homeowners filed a water damage claim each year between 2013 and 2017. The report stated that, in 2017, the total amount of insurance payouts for water damage was $13 billion. The average claim cost about $10,000.

Some types of water damage are pretty straightforward. It’s helpful to be familiar with three of them. When you call to find out if you’re covered, your insurance agent may refer to the following: Sewer or water backup, overflow and discharge, or flood.

Sewer or water backup coverage. Sewer backup describes what happens when water comes up or is pushed into your home through the pipes from sewer or drainage systems. It is a very unpleasant type of water damage because it often involves dirty sewer water that will not only destroy your personal property, but can also impact your health and cause thousands of dollars in damage.

Potential sources of sewer backup include blockage of a city sanitary main, aging sewer systems, tree roots, city-related pipeline issues and/or overflow or backup of the drainage systems in your home. If your gutter systems or rainwater pipes are blocked or overwhelmed by debris or sudden water flow it may cause a backup into your home. Sewer backup is not automatically included in most standard homeowner policies. You must add it by endorsement to make sure you’re adequately protected.

Overflow and discharge water damage. Sudden and accidental discharge or overflow from plumbing or appliances are usually covered on standard home policies. Overflow and discharge water damage is the type of water damage most people think about when they imagine a water damage claim in their home. Overflow involves water escaping or overflowing from appliances, pipes or water outlets in your home. Some examples include your bathtub or washing machine overflowing. Discharge is what happens when water is released from plumbing or appliances and then floods your home. For example, if your water heater gives out or a pipe bursts, there is a sudden discharge of water.

Flood versus water damage. People generally use the term “flooded” when you have water in your home. It can be confusing when you’re told that your homeowner’s insurance doesn’t cover flood damage. There is a difference between water damage and flood damage.

While flooding events are unpredictable, when it comes to flood water itself, there are four universal truths:

  • There’s more of it there than you think.
  • There’s more coming than you think.
  • It’s moving faster than you think.
  • It’s more powerful than you think.


Insurance views a flood as a body of water overflowing, so the level of water outside your home rises to a point where it enters your home. The official definition of a flood states that it’s “a general and temporary condition of partial or complete inundation of two or more acres and two or more properties on normally dry land.”

A good way to understand whether you have a real flood claim or a water damage claim is to determine if more than one home is affected. If only your home is affected, you probably don’t have a flood claim even though you feel that you are “flooded.” The source of water and the cause of damage is likely sewer/water back-up or overflow/discharge.

Every homeowner should consider purchasing flood insurance. If you wait until you need it, you won’t be able to buy it in time to help you. Flood insurance normally includes a 30-day waiting period between the date of purchase and the date coverage takes effect. Flood insurance is typically provided by the federal government’s National Flood Insurance Program (NFIP) through insurance agents who sell the policies on its behalf. Limits on NFIP insurance policies are capped and may not be enough to fully repair or replace a flood-damaged home and its contents. For this reason, many insurance companies offer special flood policies — often called “excess” — that offer additional dollars to pay for flood claims.

The most difficult thing to deal with when you have water damage can be figuring out if you’re covered. Now that you understand the different kinds of water damage in insurance terms, you can discuss your water damage coverage with your representative at Professional Insurance Programs to find out where coverage might be afforded on your policy and whether you should also purchase flood insurance.