Is Basement Waterproofing Covered by Insurance?

Are you familiar with everything your Berkley homeowner’s insurance policy covers?  If need to make a significant repair to fix foundation damage, or to prevent basement flooding, will your insurance cover those costs?  

When your basement springs a leak or is flooded, you can expect costly repairs. Water damage is pricey and fixing the source of the water is too. There are a multitude of ways for water to get into your basement. Common reasons for a flooded basement include:

• Cracks in the wall or foundation
• Inadequate lot grading
• Unmaintained foundation
• Leaky pipes
• Overflowing bathtubs, toilets, and floor drains

This is only a short list; your basement can be quite creative about the ways it lets water get inside. The damage caused by these water invasions can cost several hundred to many thousands of dollars. The floors, walls, fixtures, appliances, and possessions can all be damaged and add to the total cost of damage and repairs. It’s a regrettable fact that water damage is the second most common home insurance claim in the U.S. Way too many homeowners find themselves looking at a substantial bill when they least expect it.

Are basement leaks covered by insurance? 

Unfortunately, there is not an easy answer because of how many variables can be involved. But you can start determining if your leak is covered by identifying the source of the leak. The good news is that many basement leaks are covered by insurance, but the bad news is that the worst leaks usually are not. 

Do You Have Flood Specific Insurance?

If You Don’t:

In the case of basement flooding, you are only covered if the flooding is caused by a sudden event.  This means if a pipe bursts, or your washer overflows, the water damage could be covered.  This is also true if mold develops because of water.    

If you have damage to your home because of years of high humidity or a preventable leak, insurance will not cover any of the repairs.  If the flooding is due to river overflow, high rains, or other natural events, insurance not cover the repairs.

Note that even if the damages are covered, the source of them probably not.  For the examples above, you would be responsible for the cost to fix the pipe or  replace the washing machine.  

If You Do: 

If you have flood insurance and you have a sudden flooding event, you have the same coverage as outlined in the previous section.  Any damages due to years of high humidity or preventable leaks are still not covered.  

The key benefit of flood insurance is that damages from natural events are covered.  To summarize National Flood Insurance Program, a flood is: a general and temporary condition that partially or completely inundates 2 or more acres of normally dry land OR 2 or more properties (at least one of which is yours) caused by: 

• Unusual & rapid accumulation or runoff of surface waters from any source
• Mudflow
• Collapse or subsidence of land along the shore of a body of water as a result of erosion or undermining caused by currents of water exceeding anticipated cyclical levels 

Sewer & Drain Are Not Included

If your basement floods because the sewer or basement drain fails, this is not covered by regular insurance policies, nor is it covered by flood insurance.  Sewer & Drain is an additional endorsement that can be purchased separately.  Flooding caused by a failing sump pump also falls into this category.  Similar to a pipe bursting, insurance will cover the water damage, but the homeowner will be responsible for the sump pump repairs. 

Coverage for Foundation Repairs

The general rule is that insurance doesn’t cover foundation repairs caused wear and tear over the years.  This includes cracked or bowing walls resulting from hydrostatic pressure and foundation settling.

There is an extra type of coverage if you live in an area where mining has been a significant industry.  Millions of homes in the United States are built over abandoned mines, and mine subsidence is an additional policy option to think about. Most of the affected counties are in southern Indiana and Kentucky, and homes built here may be at risk for damage caused by land shifts in these mines.  

 Another Option: Purchase a Home Warranty 

There are companies that offer warranty plans to supplement insurance coverage.  Depending on the plan, there might not be an age limit, meaning no matter how old or new your home is, they have options available.  Some of these plans do include foundation cracks, appliances, and other items that might not be traditionally covered , or not fully covered,  by your regular insurance policy. 

Ideally, you would have both.  For example, say your finished basement wall gets a crack that lets in water.  The warranty would cover the crack repairs, and insurance would cover the drywall and flooring damages.

Do You Need Foundation Repairs or Waterproofing? 

If you need foundation repairs or waterproofing, you will be completely or partially responsible for the costs of the repairs, depending on the cause.  This is unfortunate and costly, many homeowners want to put off making repairs. However, it is very important to get these repairs taken care of., if it means acquiring financing.  Delaying repairs will only cost more money, as the damage gets worse.  

The first step is to look for an experienced foundation and basement waterproofing company and make an appointment.  Before you sign a contract for any service, it is always good to verify the company is reputable, insured, and accredited by the Better Business Bureau.  If you have gotten an estimate you are unsure of or if you have noticed any problems and would like a second opinion, you can request a free estimate from most companies.  An experienced project manager will evaluate the areas of concern and recommend the best course of action for you, to keep your home strong and healthy for years to come.