Imagine your home filled with sewage.
Try to imagine your pristine bathroom floor covered in sewage that’s spewing from your toilet, shower, and sink. Your home at that point is basically uninhabitable due to the stench, and you’re now left with tens of thousands of dollars in repairs due to water damage. So you pick up the phone to contact your home insurer. This is why we pay for insurance, right? Imagine your gut falling through the floor when the claims representative tells you there is no coverage on your policy for Water Back-Up and Sump-Pump overflow. You’re on the hook for all of the damage.
It’s happened before.
Local news station WRAL conducted a “5 On your Side” story back in 2019 when this very thing happened to a local Raleigh Homeowner. (Click Here to view that story). Her home is located downhill from the sewer system. Since her plumbing was older, it didn’t have a backwater valve, and the sewage eventually backed up so much so that her home was flooded with sewage. The homeowner was left with $45,000.00 in damage that insurance didn’t cover.
Why wasn’t there coverage for this loss?
Let’s start with this: Most home insurance policies do not offer coverage for flood perils. Flood insurance is a separate type of coverage that is purchased through National Flood Insurance Program, or the NFIP. Though the incident with the sewer back up isn’t the same thing as a flood that comes from heavy rainfall, it still falls under the exclusion outlined in the standard Form HO-3.
Per Section 1 Exclusions Item 3:
Water Damage Means:
A. Flood, surface water, waves, tidal water, overflow of a body of water, or spray from any of these, whether or not driven by wind.
B. Water or water-borne material which backs up through sewers or drains or which overflows or is discharged from a sump, sump pump or related equipment; or
C. Water or water-borne material below the surface of the ground, including water which
exerts pressure on or seeps or leaks through a building, sidewalk, driveway, foundation,
swimming pool or other structure;
When you sign your home insurance policy paperwork, you are agreeing to the above exclusions for coverage. It is essential you discuss the different exclusions with your Agent to determine if there are any exposures left uncovered. You cannot afford not to have these discussions.
The Good News
Most home insurers offer endorsements for the Water/Sewer Back-up peril. The endorsement for coverage can be very inexpensive. I’ve seen it as low as $40.00 annually for $25,000.00 in coverage. I’m sure that the Homeowner from Raleigh who sustained that $45,000.00 loss
wishes she’d purchased that endorsement. We’re talking about for less than $4 a month to have peace of mind that if sewage or water erupts from your drains, you’ll have a financial safety net available to help you recover.
What’s the lesson here?
It’s important that when reviewing your insurance policies with your agent, you do more than try to find new ways to save on premiums. Take the time to analyze your home and some of the perils you are concerned with. Maybe your home is built at the bottom of a hill and you’re concerned about runoff. Maybe you’ve got some dogs and are concerned about the liability you’d face if they were to injure a guest. Maybe you’ve got some expensive jewelry in the home that you want to have insured in the event of a total loss. As the homeowner, it’s your responsibility to determine your areas of risk and discuss them with your agent. Your agent can help you explore products and coverage options to secure peace of mind. As consumers, we get so caught up in how much we’re paying that we never stop to ask ourselves what we’re paying for, and why. Your Agent is there to answer those questions.
