Why Buy Water Backup Coverage?
This is a question we often hear when we are presenting a homeowners coverage with this endorsement added. In order to understand why you need the endorsement, you need to first understand what your basic homeowners policy covers and does not cover.
Most policyholders think any type of water damage is covered in their home, but this is not the case. First, check your policy's property section and go to the exclusions page. You'll notice that several types of water damage are excluded. The second one listed will say: "Water or sewage from outside the plumbing system that enters through sewers or drains." Next it will state: "Water which enters into and overflows from within a sump pump." These two exclusions are amended by adding the Water Backup coverage, sometimes called, Backup of Sewers and Drains.
With the Water Backup endorsement, you are able to purchase a specified limit of coverage for this peril. Most companies policies offer $2,500, $5,000, $10,000 and even higher levels. You want to buy enough to cover a possible loss. For example, if you have a finished basement, you would want to purchase the highest limit offered to protect your investment. If the basement isn't finished or if you don't have a basement, you may decide that a smaller coverage amount would adequate for cleanup.
Wait- why would I need water backup of sewers and drains if I don't have a basement? There are times when a sewer system has a clog and causes backups into the homes - so having the water backup coverage would provide you the coverage you need in this instance. Or your septic system could clog up, causing a backup into the home, overflowing from the drains. So, is there ever a time when you don't need this coverage? Perhaps, but I always say, better safe than sorry!
What about flooding, does water backup cover for that? No. Flood damage is not covered under your homeowners policy regardless of the endorsements. Flood insurance is a whole other topic that we'll save for the next time!
Until then, I'm still yet.....