Water Leakage and Seepage
According to the Insurance Information Institute (iii.org), water damage and freezing water line losses represent the second most frequently filed insurance claim on homeowners policies and they’re ranked third with regards to claim severity. Although there are hundreds of insurance companies selling homeowner policies, they typically all respond in the same manner for water losses that occur with a single, sudden, and unexpected introduction of water to places in your house where water shouldn’t be. These include losses such as accidental sink overflow, rain water caused by a limb through the roof, or washing machine overflow, just to name a few. One area where these products vary considerably is how they address and respond to water damage that occurs over weeks, months, or even years. A refrigerator’s ice machine supply line that’s cracked and has been dripping water behind your wall for years, or water that’s been slowly seeping through a small crack in your shower’s tile floor or wall.
Some policies include clear and specific language, that excludes coverage for water damage occurring over weeks, months, or years. That’s right, the soggy dry wall and buckling floor in your pantry closet, that occurred over several months and was caused by a pin hole leak in a hidden water line isn’t covered. Let that soak in for a minute. Other carriers allow consumers to purchase this coverage, but have preset limits available for purchase. So, for an additional premium, consumers can purchase $50,000 of coverage for water leakage and seepage losses. According to the Insurance Information Institute, the range of damages from these losses is between $1600 - $4500 with an average cost of $2660. So, $50,000 of coverage should be ample to address these types of damages. There are a few carriers include this coverage in their homeowners “all-risk” product, however, few homeowners are willing to pay the significantly higher annual premiums for these products. Some homeowners will spend a few hundred dollars every five to six years and have a full home inspection to be aware of issues like settling and/or hidden water damage, although there’s no guarantee that your house is leak free even after a full inspection. It’s important to take a preventive and proactive approach, when you become aware of a condition that might lead to leaking or seeping, and it’s critical that you have an insurance agent you trust and can talk with about this and other coverage questions.