By  Romana King  on January 25, 2022

By  Romana King  on January 25, 2022

The short answer, unfortunately, is “that depends.” Here are the variables that come into play when homeowners seek water damage protection.

Photo by Luis Quintero from Pexels

Q: My washing machine has been leaking for years and we only just learned of the leak and the resulting damage because of staining on our basement ceiling below. Will my home insurance cover this? –Alison

A: The end result of water damage is almost always the same—repairs to your floors, drywall or even electrical and heating systems. However, the cause of the damage ultimately determines whether it’s likely to be covered by insurance. What matters is how water enters your home.

Setting aside incidental floods, such as pipes breaking or washing machines leaking, natural floods—such as those caused by snowmelt runoff or an overflowing river—should cause all homeowners concern. 

A standard homeowners’ policy (or tenant insurance) doesn’t provide coverage in the event of flood damage. While government relief may be available for uninsurable damage, that relief is often slow to materialize and insufficient to cover the cost of repairs, leaving families to pick up the pieces.

You may be able to purchase flood insurance —known as overland coverage—if you don’t live in a flood-prone zone. You’ll also likely have to buy sewer backup coverage separately.

But what about floods that are not caused by natural disasters? What about those resulting from burst pipes or cracked foundations or, in your case, Alison, a leaky washing machine?

In general, standard (also known as comprehensive ) homeowners’ insurance may help cover water damage if the leak is sudden and accidental. Keep in mind, in order to be considered accidental, the flood cannot have occurred when the home was vacant for more than 48 hours (some insurance providers use a stricter 24-hour rule). So it’s important to have a trusted friend or family member check on your home every day or so if you’re away on vacation or living elsewhere for extended periods of time.

But what about slow leaks whose damage only becomes clear over time? These situations are less black and white. While most policies won’t cover damage resulting from poor maintenance—for instance, damage from a toilet you failed to repair—that doesn’t mean that all slow leaks are denied coverage.

What follows should help you understand when damage resulting from a water leak is likely to be covered by insurance. 

If you’ve got a crack in your foundation, that’s your problem, explains Peter Burns, former president of the Insurance Brokers Association of Ontario and former owner of Burns Demeyere & Associates, an insurance brokerage in Tillsonburg, Ont., that now operates as McFarlan Rowlands.

Insurance companies assume that homeowners will maintain the good, working operation of their home. This means that homeowners bear the responsibility of checking and, if necessary, repairing facets of their home—for example, it’s important to re-caulk around windows and doors and to regularly inspect the roof and foundation. 

The same applies to items and components inside the home. Clean and check all drains and hoses at least once per year. Make sure smoke and carbon monoxide detectors are working and have functioning batteries and that fans and lights are all operating as intended.

As a homeowner, you may be unaware of a leak until there’s evidence of it, such as the growth of mould, the appearance of rot or a bulging ceiling where water is pooling. Or, you may only learn of the water damage after calling in a repair specialist who discovers it while dealing with a different issue. 

If you make this type of claim, some insurance companies will refuse coverage based on the fact that regular home maintenance was not performed. Seepage—the slow, ongoing infiltration of water, as opposed to an accidental, sudden burst of water —is a common exclusion. Other insurance companies may cover the claim if the leak and damage were hidden in walls, beneath floors or above the ceiling—in other words, in areas that are not visible to the eye.

To determine if you have coverage, check if your policy has a seepage exclusion or call your independent insurance broker for guidance.

<span data-mce-type=”bookmark” style=”display: inline-block; width: 100%; overflow: hidden; line-height: 0;” class=”mce_SELRES_start”><span data-mce-type=”bookmark” style=”display: inline-block; width: 0px; overflow: hidden; line-height: 0;” class=”mce_SELRES_start”></span></span> Watch: MoneySense – Home Insurance & Climate Change

If you want protection against overland flooding, don’t be surprised if your insurance provider says that you must also pay for sewer backup coverage. When a water damage claim is filed, the cause is often a mix of sewer waste and clean flood water. Since it’s difficult to determine which came first, insurance companies often require clients to pay for both types of coverage. 

The good news is that sewer backup coverage is relatively inexpensive. The cost for flood (or overland water) coverage, however, can vary dramatically. Coverage for homes in flood-prone areas—if it’s offered at all—is significantly more expensive.

Years ago, it was virtually impossible to get insurance coverage against flooding. Sewer backup insurance was available for an extra fee, but any overland flood—where water enters the home through an above-ground route—wasn’t covered.

This changed in 2015, when the insurance company Aviva introduced the first overland flood protection add-on coverage. Today, just about every insurance broker and direct writer (an insurance company that sells directly to clients ) offers some sort of flood coverage. But packages can differ significantly between insurance companies.

For instance, one provider may cap its coverage at $15,000 and require a sizeable deductible. This means you must cover a large portion of the costs out of your own pocket—anywhere from $1,000 to $3,000—and your total claim coverage is limited to $15,000. On the other hand, the same homeowner could get as much as $150,000 worth of coverage, with no change in their deductible, as long as they install a backwater valve (essentially a flap that prevents water and waste that have exited your home through a drain from re-entering). 

The key is to understand what type of water damage is covered by each rider—the insurance term for extra coverage—and how you can increase your maximum coverage while decreasing your deductibles.

Check if your home has a backwater valve. Many newer homes—those built in the last decade—will already have this flood-prevention tool installed. If yours doesn’t, talk to a plumber. The installation will set you back around $1,000, but it will give you access to less expensive and more robust insurance coverage. And if you use your basement for anything more than storing plastic bins, you’ll want that extra coverage.

Back to your initial question, Alison. A slow leak whose damage to a basement ceiling isn’t immediately obvious falls firmly in the grey zone. However, I believe your insurance policy is still likely to cover the damage, for the following reasons. 

First, it sounds as though you were residing in the home when the damage occurred—that’s a point in your favour. As previously mentioned, almost all insurance policies exclude damage that takes place when a home is vacant or not actively monitored. 

Second, the leak was not due to your failure to maintain or properly operate your appliance. I’m assuming that you opened and inspected your washing machine on a regular basis and that you kept the area around it clean and tidy. By routinely conducting these informal inspections, you’re more likely to notice any problems early.

Finally, the damage appears to have occurred beneath the floorboards, where it can be difficult to detect issues through visual inspection alone. This lends further credibility to the idea that you didn’t willfully ignore the problem until now. 

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