Does Homeowners Insurance Cover a Flooded Basement?

A flooded basement is one of the most perplexing insurance situations a homeowner can face. Some situations are covered by standard home insurance, while others necessitate additional coverage, such as flood insurance or an endorsement. We'll go over the most common ways your basement can flood, as well as what kind of insurance you'd need in each case and whether you're covered.

When does homeowners insurance cover a flooded basement?

Your basement could flood for a variety of reasons. If any of the following events occurred in your basement, you would most likely be covered under a standard home insurance policy.

Flood Caused by Broken Appliance

If your basement's washing machine, air conditioner, or refrigerator breaks down and floods the entire room, the water damage is usually covered by a standard homeowners insurance policy. However, it is possible that your insurer will argue that the damage was caused by a lack of maintenance. They can deny your claim if they can prove the appliance broke because you didn't take care of it for a while. A truly faulty appliance malfunction, on the other hand, will always be covered.

It should be noted that the claim will not cover the cost of the new appliance itself. To be clear, the flooding caused by the broken appliance is covered, but you must pay for the new washer or unit yourself.

Flood by Leaking Water Heater

Water heater damage is covered under the same provision as leaking appliances. Again, you must determine whether the water heater is leaking due to neglect or malfunction. If your insurer discovers evidence that the cause of the leak was poor maintenance on your part, your claim will be denied.

Freezing Pipes Burst

If the temperature drops one winter night and your pipes burst due to the freezing water, your home insurance policy would cover the damage caused by the flood. If pipes from an AC unit, sprinklers, or appliances burst due to freezing, they are also covered. The main requirement is that you were living in the house when it flooded.

The only exception is if it can be demonstrated that you were still keeping the house warm or turned off all the water systems—which is common when homeowners go away for a winter vacation. If you have a second home in a cold climate, you should think about this.

Flood Caused by Overflowing Tub, Pool, Sink, Etc.

You might be surprised to learn that if your basement floods due to an overflowing tub, pool, sink, or other water receptacle, your home insurance policy will cover you. A disaster of this magnitude is considered "sudden and accidental," and your insurer will cover the cost of replacing what was destroyed. So, if your child decides to fill the basement toilet with all of the toilet paper in the house and flush it several times, home insurance will usually cover the resulting flood damage.

When doesn't homeowners insurance cover a flooded basement?

Unfortunately, there are times when a homeowners insurance policy will not cover you if your basement floods. A standard home insurance policy does not cover the following situations:

Rising Water from a Storm, Surge or Heavy Rains

In essence, any flooding caused by nature is not covered by your home insurance policy. Only flood insurance can save your basement in all rising water situations, and even then, coverage is limited.

Flood insurance will cover certain items in your basement, such as most personal belongings and appliances, but not the structure, such as finished ceilings or floors. To get the most coverage for your basement, you should purchase both dwelling and contents coverage when purchasing a flood policy.

A working sump pump that pushes water out is the best defense against a flooded basement. Preventing a flood in the first place is usually the most cost-effective and least disruptive option, especially if you have a finished basement. If your sump pump fails, you can add "sump pump coverage" to your home insurance policy to protect your basement up to $25,000 in the event of pump failure. Of course, it would have to be a malfunction and not the result of poor system maintenance.

Sewage Backup

Your insurance will not cover the damage caused by an external sewer system backing up into your home and basement. Sewage backup is one of the most expensive disasters that can strike a home, and there are few options for homeowners to recover their losses if it occurs.

Most home insurance companies offer a sewage backup endorsement, which is relatively inexpensive but only covers up to $10,000 in damage. In most cases, that is insufficient monetary protection. Repairing a sewage backup can easily cost hundreds of thousands of dollars.

Water Seeping from Underground

This is a difficult situation for a homeowner to be in because this situation is not usually covered. After a period of heavy rain, the ground can become saturated with water, and this water can seep into your basement through the ground. This is not considered a coverable calamity by homeowners insurance companies.

Flood insurance will also not cover it unless the seepage is directly related to a nearby flood. The best way to protect yourself from this disaster is to ensure that your home's foundation is solid and up to date on all inspections.