Don't Get Flooded with Unexpected Bills

Posted by Kelly Holck on Wednesday, June 12th, 2019 at 2:43pm.

Do you know if your insurance will cover damage to your home and/or belongings in case of water backup?  


Photo courtesy of GotCredit

If you're not sure, it's possible your homeowner policy would fail you if your drains or sewage system backed up. In order to be paid out on damage due to water backup, you typically need to opt in specifically for that coverage.

So, what exactly does water backup coverage entail

According to Allstate, water backup coverage is an add-on to homeowners insurance that will help pay for water damage arising from a backed up drain, sewer, or sump pump. If any furniture gets damaged or you need to hire a company to come remove the water for you, this should cover it. Unfortunately, because it's an add-on, many homeowners don't actually realize they don't have it until the time comes where they need it. Some people just choose not to enroll in it, likely because of the added cost. However, just like most things, it's commonly much less expensive to pay the low monthly premium than to pay thousands of dollars out of pocket for the damage incurred.

*Though water backup coverage is important, it's not always included in your standard insurance policy. The best way to find out what kind of coverage you actually have is to call your insurance agent. 


Photo courtesy of StateFarm

Because I'm not necessarily your local expert on water backup, I contacted our wonderful insurance agent, Brad at Thomas Bradley Insurance, to find out what information he could spare. Brad works with Acuity Insurance to get his clients the best business and personal coverage there is.

Please note: the following statistics are as of May 31st, 2019.

At Acuity, 39.5% of active homeowner policies do not have sewer and drain backup. That's 67,323 people who are at risk of paying thousands upon thousands of dollars out of pocket when an issue arises. In the state of Wisconsin, an even lower number of homeowner policies have sewer and drain backup: a whopping 53%.

When Brad and I talked, he told me that when the mass flooding happened last August here in Madison, many people were able to use their coverage to pay for some of the damage. I was initially confused: Isn't flood insurance different than water backup coverage? He went on to explain that though flooding in general isn't typically covered with the water backup option, sewage backup due to flooding is. This immediately turned my thoughts to all of the people affected by the August 2018 flood and how opting for water backup coverage could have potentially saved them a lot of stress and a lot of money

Another interesting statistic that Brad shared is the dollar amount people typically choose when deciding on a limit for their coverage. According to Acuity's records, over half of their homeowner policies with water backup included, have the add-on at a $5,000 limit (see chart below).

 

That being said, the average water backup claim Acuity has seen over the past three years is $7,334. Therefore, if you'd like to avoid paying out of pocket for repair bills, it might be worth the slightly higher monthly premium to select a higher limit than $5,000.

It honestly doesn't matter who you are, where your house is located, what type of plumbing you have, etc. Water backup can happen to anyone. In fact, Acuity paid out over $8.77 million in water backup insurance claims from 2016-2018 and over $4.05 million last year alone! Make sure you're prepared when a disaster like a broken sump pump or backed up sewer strikes. 

Please don't hesitate to reach out to us with any questions that come up, 608.729.7351. And, if you're still searching for the perfect homeowners insurance policy and want to work with qualified and educated agents, send Brad an email at bgoll@thomasbradleyinsurance.com. He'd be happy to help! 

 

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