What Is a Water Exclusion Clause?
A water exclusion clause is a restriction in homeownersand renter'sinsurance policies that denies coverage for some water-related claims. Events that are likely to fall under a water exclusion clause include damage caused by flood, tsunamis, standing water, groundwater, and drain or sewage backups.
Homeowners and renters may be able to add some types of water damage coverageexcluded in the standard policy by purchasing a rider or separate, specialized insurance.
Key takeaways
- A water exclusion clause is a standard feature of property insurance contracts, denying coverage of various categories of loss associated with aquatic events.
- Typically, water exclusion clauses include floods due to external causes; sewage or water main failure/backups; tsunamis; standing or groundwater.
- Homeowners policies typically do protect against water damage from a sudden mishap inside the home, like a burst pipe or overflowing toilet.
- Separate flood insurance furnishes coverage against flooding.
Understanding a Water Exclusion Clause
A water exclusion clause is common in most property insurance policies. The reasoning is that only specific areas are prone to water-related natural disaster events, such as floods, tidal waves, or tsunamis. Water exclusion is one of several types of exclusion clauses found in homeowners and renter insurance contracts. Other standard exclusions include movements of the earth (quakes, landslides), wars and certain other government actions, and nuclear hazards and events.
However, water-related perils aren't totally excluded by homeowners insurance. Most policies routinely do cover water damage that occurs for specific reasons—usually a sudden or accidental event that occurs within the structure, such as a burst pipe or malfunctioning dishwasher or other plumbing/water supply-related problems. Gradual damage or wear and tear that happens over time generally isn't covered, though.
Destruction arising out of certain weather events—such as thunderstorms that send a tree crashing through a wall, or snow that collapses a roof, allowing water to pour in—generally are covered (at least, the water damage they cause is; ironically, the cost of repairing the wall or roof may not be). Some types of hurricane-related damage may also be covered, though in 19 states and the District of Columbia policyholders must pay an additional hurricane deductible before coverage kicks in.
Special Considerations: Floods and Water Exclusion Clauses
Unless it's due to an internal cause, like a gushing washer/dryer or an overflowing toilet, flooding is a typical part of a water exclusion clause. These clauses generally define a flood as rising or surface waters that come from the outside in, though even this is often subject to controversy—and litigation: Should the clause apply if the flood ensues from man-made forces (a burst dam, a collapsed levee) rather than natural forces (e.g., continuous rain that makes a river overflow its banks)? Does surface water come solely from rain or melting snow, or does it count if it's been sitting on a man-made surface such as pavement, a balcony, or a roof?
Despite the legal debate, the bottom line is that a flood from an external source that seeps into a home probably won't be covered by the hazard insurance component of a standard homeowners policy. The expensive nature of water damage, and the prevalence of it—in 2018, water damage and freezing represented 23.8% of all insurance losses—gives homeowners and renters reasons to find alternative coverage options.
$10,849
Average losses to homeowners due to water damage and freezing in 2018, according to the Insurance Information Institute.
Usually, that means purchasing a separate policy for protection against flood damage, known as flood insurance. In fact, for properties in high-risk areas, lenders sometimes require mortgagedhomeowners to carry flood insurance—at least to protect the structure of the dwelling. (Unlike a standard homeowners policy, flood insurance requires that a policyholder buy separate policies to cover the property and the property's contents.) Homes financed by a federally backed lender, for example, require flood insurance if they are located in a government-designated flood hazard zone.
Flood insurance policies are available for both residential andcommercial properties. Renters can also purchase flood insurance policies that cover theirpersonal propertyin a single-family home, apartment,condominium, or business property.
While flood insurance can be purchased through many different insurance companies, the rates are regulated by the federal National Flood Insurance Program (NFIP). So the same policy costs the same amount, no matter which company it is purchased through.
FAQs
A water exclusion clause is a restriction in homeowners and renter's insurance policies that denies coverage for some water-related claims. Events that are likely to fall under a water exclusion clause include damage caused by flood, tsunamis, standing water, groundwater, and drain or sewage backups.
How to maximize insurance claim water damage? ›
When it comes to water damage claims, evidence is key. Take photos and video of the leak occurring and the damage done to your floors. Also, be sure to hold on to any broken pipes, garbage disposals, filtration systems, washing machines, water heaters, or any other devices that may be responsible for the leak.
What are the four major exclusions found in homeowners insurance policies pertaining to real property? ›
Important: Read exclusions in your insurance contract. Earthquake, flood, mold, earth movement, and “wear and tear” are some of the perils that are usually excluded. When an insurer writes your homeowners coverage, the insurer is legally obligated to offer you earthquake coverage for an additional premium.
What is the exclusion clause in an insurance policy? ›
Similarly, exclusions are a type of clause that dictate what is not covered by the contract. For example, the policyholder's spouse will not be covered if the policy buyer opts for an individual life insurance contract. The non-coverage of a spouse comes under insurance exclusions.
What does exclude water mean? ›
Excluded Water means any water other than Produced Water or Flowback Water that is generated from Producer's operations or that collects at or near the Well Pads.
Does insurance cover for surface water? ›
In the insurance policy, all of the words that surround the term “surface water” are items originating from natural causes. An ocean, river or sea may cause flooding, as could excess rain and tidal surges. None of these losses are covered under a standard homeowner's policy – this was the intent of the policy.
What condition voids a homeowner's policy? ›
Common exclusions in even the most comprehensive homeowners policies include: earth movement, such as earthquakes; sinkholes or landslides that damage your home; water damage, such as floods or sewer back-ups that leak through a pipe or seep through the foundation causing damage to your home; damage resulting from ...
What are exclusions and limitations? ›
Limitations are conditions or procedures covered under a policy but at a benefit level lower than the norm. Exclusions, on the other hand, are conditions or procedures that are completely omitted from coverage. Your health insurance policy should list all limitations and exclusions.
What is the most common damage to your home that insurance does not cover? ›
Standard homeowners insurance does NOT cover damage caused by flooding, earthquakes, termites, mold, or normal wear and tear.
How do exclusion clauses work? ›
An exclusion clause is a clause that excludes or restricts liability. Therefore, it is a clause under which a party seeks to exclude or limit its liability for non-performance of the contract.
An exclusion is a provision within an insurance policy that eliminates coverage for certain acts, property, types of damage or locations. Things that are excluded are not covered by the plan, and excluded costs don't count towards the plan's total out-of-pocket maximum.
What makes an exclusion clause invalid? ›
If the thing that goes wrong which a person is claiming for is outside the scope of the agreement as contemplated by the parties, then the exclusion clause may not operate. If the exclusion clause is inconsistent with the main purpose of the contract, the exclusion clause may be ineffective.
What is meant by exclusion zone water? ›
The existence of the exclusion zone (EZ), a layer of water in which plastic microspheres are repelled from hydrophilic surfaces, has now been independently demonstrated by several groups.
What is an exclusion in the flood policy? ›
Standard exclusions include: flood, earth movement, earthquake, landslide or mudflow, settling, cracking, shrinking, subsidence or sinkhole, erosion, sinking, rising, shifting, expanding or contracting of earth. However, most homeowner's policies will cover an ensuing fire or explosion resulting from earth movement.
What is permanent water exclusion? ›
Site dewatering is usually achieved by controlling groundwater through exclusion (permanent) or removing it by pumping (temporary or permanent). Groundwater control by exclusion is achieved by constructing an impermeable or low permeability cut-off wall to keep the groundwater out of the excavation.
What happens when you withdraw too much water from an aquifer? ›
Some consequences of aquifer depletion include: Lower lake levels or—in extreme cases—intermittent or totally dry perennial streams. These effects can harm aquatic and riparian plants and animals that depend on regular surface flows. Land subsidence and sinkhole formation in areas of heavy withdrawal.
