Alyssa from Eaton & Berube Insurance in Nashua, NH, has written a special guest article for us today. This article will be helpful to homeowners that have sump pumps or are thinking about installing one in their basements. Sump pumps, water damage, and homeowner’s insurance are all discussed in this article. Please continue reading:
“Is water backup covered under my homeowners insurance policy if my sump pump fails and my basement floods?”
This is a popular question among sump pump owners, and the answer varies. In most circumstances, water damage caused by sump pump failure is not covered by a conventional homeowners insurance policy. This type of coverage, however, can be readily added to your homeowners policy in the form of an endorsement “Approbation.”
This endorsement may be added to most homeowner’s policies for a small fee, and it will cover damage caused by backed-up water. This covers objects damaged by water as well as the cost of cleaning up the water in your home, as long as the loss was not caused by the homeowner’s negligence.
The property damage covered by a water backup and sump pump failure/overflow endorsement is not the same as the repair of the appliance or sump pump that failed.
An Equipment Breakdown Endorsement would normally offer coverage for the sump pump itself.
It’s vital to understand that, like any other form of coverage, this one can differ depending on which insurance provider the homeowner chooses.
An agent should discuss all of the homeowner’s issues with him or her, compare pricing, and provide coverage suggestions based on the homeowner’s specific situation and exposures.
Although your sump pump could fail at any time, homes in New Hampshire are particularly vulnerable during the spring season, when significant volumes of snow melt and heavy rain falls. In many houses, especially those with finished basements, less than an inch of water can wreak thousands of dollars in damage, thus a water and sump pump backup solution is a smart investment.
Because most homeowners don’t deal with insurance on a daily basis, having an insurance agent you can trust to assess your exposures and provide coverage recommendations that will completely protect you and your possessions is critical. Our agents are here to answer any additional questions you may have about sump pump failure insurance coverage.
Homeowners frequently have a sump pump system in place, as well as a backup sump pump.
These two devices provide added piece of mind for homeowners in the event that the main pump fails during a furious New England storm.
Does homeowners insurance cover sump pump installation?
Your sump pump is the first line of defense against water damage when a natural disaster causes flooding in your basement, pushing the water down and away from your property. But what happens if your sump pump breaks or stops working? Is your insurance coverage going to cover the water damage, or will they use this as a way to avoid paying for the repairs?
The majority of the time, the answer is no. Water damage caused by faulty or damaged sump pumps is typically not covered by homeowner’s insurance plans. There is, however, something you can do to ensure that you are protected.
What type of water damage is covered by homeowners insurance?
Water damage is a regular occurrence in homes, and it can be caused by a number of factors. There are, however, only a few water damage scenarios that your homeowners insurance will fully cover. The following are examples of water damage:
Water leaks and water damage are only covered by homeowners insurance if the cause is abrupt or accidental. For example, if a pipe bursts out of nowhere, your insurance coverage will most likely cover the damage. Homeowners insurance does not cover water damage that develops gradually and over time.
In addition, some homeowner’s insurance policies will cover the costs of water damage. As a result of the initial harm, other damages ensue. For example, if a pipe bursts and the resulting water damage destroys an adjacent wall, you may be eligible for reimbursement for the cost of repairs.
However, not every homeowners insurance policy covers the resulting damage, so double-check the fine print to see what’s covered. If the subsequent damage is covered, keep in mind that the source of the water leak will not be covered. As a result, if a pipe bursts and causes damage, the cost of a replacement pipe may not be covered.
What does sump pump coverage cover?
Water backup coverage, also known as sewer backup coverage or sump pump backup coverage, is one of the most common and essential homes insurance endorsements available. It protects your home and personal belongings from water damage caused by a sump pump, drain, or sewage backup or overflow. Â Water backup coverage, a very high-value add-on that costs as low as $30 a year on top of your normal policy, is offered by almost every carrier because sewage backups are such a common and annoying problem.
The amount of coverage and whether or not this endorsement is available varies from company to company and state to state, however most carriers provide water backup coverage ranging from $5,000 to $25,000 in most cases. Consider how much it would cost to repair everything that could be harmed in the event of a worst-case drain backup or sump pump overflow when deciding on coverage limits. Calculate the cost of replacing your flooring, the worth of your furniture or personal possessions, and anything else that could be damaged if a sewage or drain backup occurred.
How much does it cost to replace sump pump?
Cost of a New Sump Pump The cost of replacing a pedestal sump pump ranges from $400 to $900, with an average cost of $650. Replacement expenses for submersible sump pumps range from $800 to $2,000, with an average of $1,400.
Will my basement flood if sump pump fails?
If your sump pump malfunctions after a heavy rainstorm, your basement may flood, causing substantial water damage to your property as well as a major mess. A power loss is the most typical cause of sump pump failure.
What is considered sump pump failure?
A sump pump, like a first aid box, a fire extinguisher, or your home’s security system, is rarely used, but it can be an invaluable tool in an emergency. Sump pumps aid in the mitigation and prevention of such disasters by immediately emptying flood water from a home’s basement through an external output pipe. And, like most emergency equipment, it’s critical to keep your sump pump in good working order and free of mechanical issues. If you don’t, you could end up with a flooded basement and thousands of dollars in damage. We hope that by identifying the eight causes of sump pump failure when it is most required, you will be able to avoid these possible issues.
Storms and power outages frequently coincide to create a lethal combination that results in flooded basements around the country. This is owing to the fact that big rainstorms result in excess water, and a power outage renders your sump pump incapable of draining water.
Fortunately, you may avoid this problem by purchasing and installing a backup generator for your sump pump. If you lose power during a storm, you can manually turn on this generator to prevent flooding in your basement.
A jammed switch is the most typical mechanical issue that leads to sump pump failure. The float that activates the switch becomes ineffective when the pump shifts inside the basin, forcing it to lodge against the side of the pump, rendering it ineffective. It’s also possible that debris will clog the float, rendering it ineffective. Both of these issues may usually be resolved with some cleaning and repositioning of your sump pump within the basin.
If your sump pump isn’t the proper size or can’t handle the required horsepower, it can easily be overwhelmed by an influx of water. A sump pump that is too large will overwork and have a shorter lifespan, whereas a sump pump that is too small will underwork and have a shorter lifespan.
You can also solve the issue of size by determining how much horsepower your sump pump requires. To appropriately deal with potential floods, you’ll need a 1/3 horsepower sump pump capable of pumping 35 gallons of water per minute. If your home is on a high water table, a 1/2 horsepower sump pump capable of pumping 60 gallons of water per minute is recommended.
Flood water will pour back down the pipe and all over your basement if your sump pump’s discharge line is frozen or clogged with debris.
While it is impossible to prevent your discharge pipe from freezing, you can build a special discharge line that permits water to depart your basement even if your main discharge pipe is frozen solid.
Make sure your discharge pipe’s opening is shielded with a grate to keep it from clogging. A protective cover will keep dirt and small animals out of your discharge pipe, preventing it from clogging.
Your sump pump may only require a good cleaning and some quarterly maintenance. Running a vinegar solution through your sump pump, ensuring sure your float is unrestricted, and cleaning all the vents on your sump pump and the air holes on your discharge line can all be done in a matter of minutes.
Years of wear and tear finally cause your sump pump to fail after 7 to 10 years of service. Although some sump pumps can last much longer than this, it is suggested that you replace your sump pump after ten years to guarantee optimal safety and efficiency.
While the two remaining probable failures are uncommon, you may want to look into them if none of the other options help you solve the problems your sump pump is having.
It’s likely that your sump pump was placed wrongly at first, resulting in its current ineffectual status. Several things could have gone wrong during the original installation of your sump pump:
A backflow of water might cause the pump impeller to revolve backwards and detach from the motor shaft if a check valve is not put on the sump pump’s discharge line. If this happens, your sump pump’s motor will sound like it’s functioning, but no water will be pumped out the discharge line.
To prevent air pressure from building up within the discharge pipe, an air relief hole should always be placed between the pump and the check valve. Without an air relief hole in the discharge line, air pressure will build up, forcing your sump pump to work harder to resist the pressure. If you make your sump pump work harder than it needs to, it will have a shorter lifespan and may break suddenly.
Many people may try to stuff their sump pumps with gravel or mud to make them fit into the hole they excavated for them. Gravel and dirt, on the other hand, will cause your sump pump to fail by interfering with the on/off switch and float arm.
If you’re ever unsure about installing a sump pump on your own, it’s best to play it safe and get an expert to assist you.
It’s possible that your sump pump is malfunctioning, however it’s doubtful. It’s critical to test your sump pump as soon as possible after installation to ensure it’s in good working order.
We hope that by determining the causes of sump pump failure, you will be able to keep your basement dry and have some extra cash in your pocket.
What happens when your sump pump fails?
The extra water from a major storm will begin to build at the lowest spot in your home if you don’t have a functional sump pump. The foundation, crawlspace, or basement could be that spot. Water will begin to deform wood, create rot, and contribute to mold growth regardless of where it settles.
If you lose power to your home, your sump pump may malfunction. You can use a backup battery, a secondary generator, or even a backup sump pump to achieve this. Which one you pick is determined on your surroundings. If you get a lot of rain, a second sump pump could help a lot.
Why is my sump pump bone dry?
Take our word for it. Elven magic does not allow water to enter a sump hole. It pours there, literally from wherever it may have originated. It can be a direct flow at times. It is the only seepage in some cases. What matters most is that you establish how much water is in your sump pit while being comfortable.
Another problem in this scenario is when it is just dry at one time and moist at another. This is typically linked to the season in which you are currently living. During rainy times, your sump pump pit is more likely to be moist than at other times. Your sump pump pit will be significantly dryer during the dryer seasons than at other times of the year.
The crucial term in the preceding description is “usually,” since when the circumstances of your pump and pit differ significantly, it’s necessary to take more thorough notes. For example, if your sump pump pit is full of water in the middle of summer, when conditions have been and typically are dryer, it’s definitely time to investigate what’s causing the extra water.
How do I make an insurance claim for water damage?
When you return home from vacation, you discover a little pond has formed in your basement. Something has leaked, overflowed, or burst in the house. What was your initial reaction? Panic. Your second question is, “How can I get insurance to cover water damage?” Take a deep breath and avoid panic. The actions that follow are meant to assist you.
Step 1: Determine the source of the water; take steps to stop it from flowing.
Take immediate action to stop more water from flowing where it shouldn’t if you’re sure it’s safe to do so. This could entail turning off your home’s main valve (which usually takes a wrench) or turning off a single water supply valve, often known as a “stop.” To stop the flow of water, turn off (clockwise) the stops leading to your dishwasher, toilet, washing machine, or icemaker by hand. More information on how to turn off water supply valves can be found here.
Before a tragedy happens, it’s a good idea to look into water leak detection systems and automated shutoff valves. With a little investment, you might avoid a major claim and possibly save money on your house insurance.
Step 2: Determine if your water damage is covered by your home insurance policy.
Water damage accounted for approximately one-fourth of all house insurance claims in 2018. Between 2014 and 2016, the number of water damage claims in the United States actually outpaced the number of fire and hurricane-related losses. What do these figures imply? Water damage is a rather regular occurrence. A conventional homeowner’s policy, however, does not cover all types of water damage.
Water damage is usually covered by homeowners insurance if it occurs suddenly or accidentally. To put it another way, you couldn’t have guessed it would happen. Water damage caused by a lack of home maintenance/neglect (e.g., a roof that hasn’t been repaired in 30 years) is not covered. Flood water damage isn’t covered either (unless you have a separate policy for flood insurance in Massachusetts).
- Water from a flood or a quick thaw seeping into the basement (unless you have flood insurance)
- Backup of a sewer or water line (unless you have a sewer backup endorsement, which is simple to add to any homeowner’s policy)
Step 3: Call your insurance agent and report the claim.
Time is of the essence when it comes to flood damage. Mold and mildew can appear 24-48 hours after exposure, according to FEMA. So, if your pipe bursts on a Friday night, don’t wait until Monday morning to notify your agent or insurance company. Most insurance companies have 24-hour hotlines to help you navigate the claims procedure and provide cleanup advice.
Unless you’re confident in your ability to clean and dry the area fully on your own, you should at the very least contact a water damage/restoration firm. Insurance companies may be hesitant to recommend a specific water damage firm, but they should be able to point you in the direction of a few nearby possibilities.
NOTE: If your dedicated insurance agent is unavailable at the time of the claim, be sure you contact them during office hours. Why? The distinction between insurance agents and insurance firms is significant. Both of them should, ideally, be aware of what is going on at your home. It’s your agent’s role to act as your advocate in the event of a claim, ensuring that you receive a prompt and adequate answer from the carrier. One reason we advocate working with an independent agent rather than a direct writer or “captive” agent is that agents can assist in negotiating a settlement for any damages (see Step 6).
Step 4: Get the water and moisture professionally cleaned up.
Before moisture or mildew develops, a water damage/restoration firm (WD/RC) is frequently called in to pump out any standing water and thoroughly dry any surfaces. After closing and ventilating the damp area, the WD/RC may need to use special cleaning solutions if mold is already present.
Not all water damage restoration firms are made equal. Unfortunately, some people may try to take advantage of an emergency situation where you want immediate assistance. Make sure you acquire an estimate and written verification that the company is licensed and insured before signing any contracts or work orders. Examine the company’s internet feedback. Request client references from your town or neighborhood.
Keep in mind that the WD/RC you hire does not have to be the same one you hire to repair your walls, flooring, woodwork, ceilings, cabinets, and other structural elements after the water has gone. Although many water damage firms also provide contracting services in addition to water and mold cleanup, this does not necessarily indicate they are the best option for your repairs. Again, acquire a quote… and consult with at least one other contractor before signing any contracts or agreeing to further work. A person who specializes in carpentry, flooring, or drywallnot a WD/RCis often the ideal individual to undertake carpentry, flooring, or drywall.
Step 5: Determine if you need to leave the home.
Water damage can lead to unsafe or harmful living conditions within the home in severe circumstances. Flooding might bring household chemicals or waste water into the mix, which you don’t want to wade through. There’s a chance you’ll get electrocuted. Mold spores can contaminate the air even after any standing water has been removed.
If you feel any of these problems are at hand, get advice from your agency and your WD/RC team on the best course of action. Most insurance policies cover hotel expenditures as well as meal expenses if you are forced to leave your home. However, you’ll want to know how much (if any) coverage you have for these charges, as well as how you’re supposed to front and document them (pay for them yourself before getting reimbursed). If you decide to stay and eat somewhere else, make sure to keep your receipts.
Step 6: Take photos of the damaged area and any damaged possessions.
Your house restoration crew will most likely take photos of the damaged area, but you should take your own as well. (You don’t want to be pursuing this company for documentation if you decide to part ways with them later.) You should also photograph any items that require cleaning or replacement. Wet objects are only part of the problem when it comes to water damage. Moldy objects in drawers or closets should be professionally cleaned as well. You might be able to get reimbursed for those costs.
NOTE: Most insurance policies do not cover the appliance that caused the problem in the first place in the event of water damage. If your icemaker or dishwasher leaks behind your cabinets, for example, your insurance may cover drywall and cabinet replacement but not a new fridge or dishwasher.
Step 7: Meet with your adjuster.
The insurance company will dispatch an adjuster to your home as soon as feasible. He or she will assess the damage, photograph it, and take measurements. The adjuster will also inquire about the cause and timing of the damage. His objective is twofold. First, he’s attempting to calculate the cost of repairing the damage. Second, he’s trying to figure out who was at blame.
You might be thinking to yourself, “What if it’s my fault?” Don’t be concerned. Unless you created the problem on purpose (for example, insurance fraud), your insurance policy will protect you. Accidents are the reason for insurance. Even unintended consequences. You’re still insured if you leave a candle burning overnight and your house burns down, even if it was your fault. Water damage follows the same approach. You’re still insured if you build your own toilet (inadvertently, by accident) and water starts pouring through your ceiling.
If it was someone else’s fault, though, the insurance company is interested in learning more. Let’s pretend you didn’t install that toilet incorrectly; let’s pretend it was installed by a licensed plumber who should have known better. In that situation, your adjuster and insurance company may pursue “subrogation,” which entails suing his insurer for the harm he did. The same can be said about a malfunctioning appliance. Your insurance company may seek compensation from the manufacturer of a faulty washer. This is fantastic news for you because if they’re successful in subrogating, you might not have to pay your deductible for the claim.
Step 8: Understand your loss settlement: ACV vs. replacement cost.
Your adjuster will offer you a written estimate of how much it will cost to restore your damage after he has completed his evaluation. He’ll most likely make a list of labor and material line items (drywall, paint, insulation mortar, tile, etc.). He may also issue a check for all or part of this amount, depending on the extent of the claim, so you can get started on repairs. Yay!
Just be aware that the settlement amount may appear to be a little low. Unless your homeowner’s insurance policy specifies otherwise, “When you say “replacement cost value,” you’re probably referring to an actual cash value, or ACV. ACV is the current value of your property, not what you paid for it or what it would cost to make it brand new. If you invested $20K on new cabinets 15 years ago, your loss settlement would reimburse you for that amount minus depreciation. More on ACV vs. Replacement Cost can be found here.
Here’s a complicated caveat: in some situations, insurance providers will issue what’s known as a supplemental policy “holdback on depreciation.” This means that they will eventually give you back the depreciation amount they deducted, but only after you present proof that you spent all of the money they gave you toward applicable repairs and paid your deductible. You will be needed to send bank statements or canceled cheques to the various vendors involved as proof of payment.
Why do insurers pay claims in this manner? It’s partly because they want to make sure you’re spending your money wisely. A homeowner has collected a water damage payout and gone to Vegas on several occasions, never fixing the damage he claimed. Alternatively, they may have used the full settlement to remodel a piece of their property, such as replacing linoleum tile with Brazilian hardwood. The adjuster’s responsibility also includes keeping you on track for a comprehensive and equitable repair.
Insurance company settlement payments are frequently made out to you and your mortgage lender. This implies that before you can cash or deposit the monies, you must mail the check to the mortgage company and have it endorsed by the Loss Draft department. This extra step can add time and frustration to the reimbursement process, but it’s necessary to verify that your lender is aware of a harmful occurrence at your residence. They may need a house inspection after the repairs are completed if they know.
Step 9: Meet with several contractors.
It’s time to repair/rebuild the affected area now that the water is gone and any mold or mildew is no longer a threat. Meeting with many contractors may not be necessary for modest work. After all, the time you’d spend contacting, interviewing, and visiting with several pros might not be worth the difference in a few hundred bucks.
On the other hand, if you’re working on a big projectespecially one with a lot of subcontractorsa it’s good idea to choose the best partner you can. Your insurance provider will not tell you who to use this time. It’s up to you to evaluate contractors, make sure they’re properly licensed and insured, and compare their prices to your adjuster’s settlement amount. Another benefit of meeting with different contractors is that if you believe your adjuster’s estimate is too low, you may establish that more than one specialist agrees with you.
Step 10: Negotiate the settlement for repairs.
Negotiation may not be necessary for modest claims. Larger jobs, on the other hand, can be difficult to coordinate your adjuster and contractor. Your independent insurance agent can help you with this as well. Ask your agency to act as a middleman if you don’t have the stomach to haggle over what defines like-kind replacement materials. He or she has greater experience with this process and will most likely be able to help you frame your argument.
Although your insurance company will not pay for modifications to your home (features and materials that were not present prior to the damage), you can take advantage of this chance to update the damaged areawhether it’s a kitchen, bathroom, or basementand pay for it yourself. Many homeowners who have had water damage do not want to reinstall the identical 1970s bathroom tiles or laminate worktops. If this is your circumstances, tell your adjuster everything you know about your goals and ambitions. Calculate the difference between restoring the bathroom as it was and developing the bathroom you really desire with your contractor.
Step 11: Just in case… be prepared to get non-renewed.
This isn’t always the case. Many homeowners willingly maintain their service with their present provider, however… Did we mention that after a significant claim, your insurance provider may decide not to renew your policy? We understand how bad it is. And many people believe it is unjust. You pay for insurance in case you require assistance. And then you’re penalized as a result of it.
Insurance firms, on the other hand, use complicated formulae to assess which risks (and which clients) are worthwhile. This allows them to remain lucrative enough to assist the people they have promised to assist. They’d be out of business in no time if they vowed to aid everyone, regardless of loss history.