Does Insurance Cover Basement Flooding?

Will insurance cover basement flooding?

Whether insurance covers basement flooding depends entirely on the cause of the flooding and the specifics of your homeowner's or renter's insurance policy.

Basement flooding caused by a sudden and accidental event, such as a burst pipe, a sewer backup, or a heavy rainstorm overwhelming the drainage system, is more likely to be covered.

However, flooding resulting from gradual water damage, a faulty sump pump, or a cracked foundation is generally not covered under standard policies because it could have been prevented.

Many insurers offer optional flood insurance, which is separate coverage and necessary for protection against flooding from natural causes. Always review your policy carefully to understand your specific coverage and exclusions.

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When does insurance cover flooding?

Insurance coverage for flooding depends on your type of policy. Standard policies generally do not cover flood damage. Flood damage is usually covered only by an additional flood policy.

However, there are some limited circumstances where a standard homeowner's policy might cover water damage from flooding, but these are exceptions:

• Sudden and accidental water damage from a plumbing failure: If a pipe bursts and floods your basement, this is typically covered under your policy as a covered peril. The key is that the water damage must be sudden and accidental, not a gradual seepage or a result of a natural event like a flood.
• Water damage from a broken appliance: A malfunctioning washing machine, hot water tank, or dishwasher that overflows and causes water damage is usually covered under a homeowner's policy.
• Water damage from a roof leak: A sudden and accidental leak from a damaged roof causing water damage inside your home is generally covered.

Here is an example of when basement flooding would be covered

Let's say the Miller family lives in a house with a finished basement used as a family room and home office. A severe rainstorm overwhelms the city's drainage system, causing a backup in the sewer line. This backup forces sewage and water into their basement, damaging the drywall, carpeting, furniture, and electronics. Because this was caused by a sudden and accidental overflow or backup of a sewer or drain, and not lack of maintenance, their insurance policy (which included additional water protection) covered the damages.

When is basement flooding not covered?

Basement flooding is often excluded from standard policies, or covered with significant limitations. CBC has recently reported on why insurance won’t cover you if your basement floods. Here are some common scenarios where basement flooding might not be covered:

• Flood damage from a naturally occurring source: This is the most common exclusion. Standard homeowner's insurance typically doesn't cover flooding caused by overflowing rivers, lakes, or streams, heavy rainfall, or storm surges. You can take out additional coverage to protect against these perils.
• Sewage backup: Backups from sewers and drains are frequently excluded from standard policies unless you have a specific endorsement added to your policy.
• Ground water seepage: Slow, gradual seepage of groundwater into your basement is usually not covered. This is different from a sudden and accidental influx of water from a defined source, like a broken pipe.
• Neglect or lack of maintenance: If the flooding is a direct result of your failure to maintain your property (e.g., clogged drains, failing sump pump, not installing a backwater valve), your claim might be denied.
• Failure to mitigate: Your claim could be reduced or denied if you fail to take reasonable steps to prevent further damage after the initial flooding (e.g., removing waterlogged items).
• Pre-existing conditions: Damage caused by pre-existing conditions that contributed to the flooding (e.g., a cracked foundation) might not be fully covered.
• Intentional acts: Flooding caused by intentional acts, such as deliberately damaging a pipe, will not be covered.

Here is an example of when basement flooding would not be covered

The Millers' family insurance didn't cover the basement flood damage caused by heavy rain that overwhelmed the drainage system, as their policy excluded damage from overflowing water.

Although their sump pump malfunctioned, the adjuster noted the sheer volume of rain would have flooded the basement anyway. Standard coverage doesn't cover floods, requiring a separate policy, which the Millers regretted not having due to their creek-adjacent home. They now face significant repair costs.

What does insurance cover if I have basement flooding insurance?

Basement flooding insurance typically covers the damage caused by the flood itself, not the source of the flooding. This means your insurer will likely cover the cost of repairing or replacing damaged floors, walls, and the contents of your basement. Restoration costs, such as those for a cleanup crew, are also usually covered. However, the cost of repairing or replacing the source of the flood (e.g., a malfunctioning sump pump) is generally not covered.

If you store valuable personal items in your basement, it's crucial to review your contents insurance to ensure your belongings are covered.

To avoid out-of-pocket expenses for replacing damaged items at their current value, consider adding or evaluating replacement costs related to your policy. This ensures you'll receive the full cost of replacing damaged items, regardless of their age or depreciation.

Basement flooding statistics

Here are some statistics about basement flooding:

• Initial estimates from Catastrophe Indices and Quantification Inc (CatIQ) indicate that the severe flash flooding in Toronto and other regions of southern Ontario between July 15 and 16, 2024, resulted in over $940 million in insured damage.
• According to a recent IBC report, severe weather in 2023 resulted in over $3.1 billion in insured damage throughout Canada.
• Insured losses from severe weather in Canada now consistently surpass $2 billion annually, a significant increase compared to the $675 million average annual loss experienced by Canadian insurers between 2001 and 2010.
• A flooded basement costs an average of $43,000 to repair, the IBC told Global News.

Common causes for basement flooding

Basement flooding can stem from a variety of causes. Understanding these causes is crucial for preventative measures and choosing appropriate coverage. Here are some examples of common causes for floods:

• Heavy rainfall and overflowing sewers: This is perhaps the most common cause, especially in areas with inadequate drainage systems. Overwhelmed storm drains can back up into basements.
• Flooding from nearby bodies of water: Rivers, streams, and lakes overflowing their banks can inundate nearby basements.
• Ground water: High water tables, especially after periods of heavy rain, can cause seepage into basements, particularly those with poor waterproofing.
• Poor drainage around the foundation: Improper grading or clogged gutters can direct water towards the foundation, leading to leaks and flooding.
• Plumbing and appliance failures: Broken pipes, leaking faucets, or overflowing toilets can cause significant water damage. Washing machines, dishwashers, and water heaters can malfunction and overflow.
• Clogged drains and sump pumps: A clogged drain can back up and flood a basement, while a failing pumps can't remove water effectively.
• Foundation cracks: Cracks in the foundation walls or floor can allow water to seep into the basement.
• Severe weather events: Hurricanes, thunderstorms, and melting snow can all contribute to basement flooding.
• Human error: Neglecting maintenance, such as failing to clean gutters or address foundation cracks can lead to bigger problems.
• Poor grading: Improper land slope causing water to pool near a home's foundation can lead to basement leaks. Proper sloping is essential to direct water away from the house and prevent damage.

10 tips to prevent basement flooding

You can prevent basement flooding by proactively addressing exterior and interior vulnerabilities, as mentioned by the City of Toronto. Here are 10 tips to consider to limit the risk of a flooded basement:

1. Ensure proper grading away from the foundation
2. Keep gutters clean
3. Properly extend downspouts
4. Apply waterproof sealant in foundation cracks
5. Avoid planting near the foundation
6. Maintain a sump pump (with battery backup)
7. Fix plumbing and appliance leaks
8. Install a backwater valve
9. Inspect your property for moisture
10. Learn what not to flush or put down the drain

Finally, obtain additional coverage, especially if you live in a high-risk area, as standard homeowner's insurance rarely covers basement flooding.

What to do if your basement is flooded

A flooded basement is a serious situation requiring immediate action. Prioritize safety, then damage control, and finally, prevention for the future. Here's a breakdown:

• Turn off power: Immediately switch off the electricity to the basement at the main breaker box to prevent electrocution.
• Don't enter standing water: Floodwater can be contaminated with sewage, chemicals, or other hazardous materials. If you must enter, wear protective gear (rubber boots, gloves, and possibly a respirator).
• Check for gas leaks: If you smell gas, evacuate and contact your gas company.
• Identify the source: Try to determine what caused the flood (broken pipe, sewer backup, heavy rain, etc.), if it is safe enough to do so. This is crucial for repairs and claims.
• Photograph and video: Document the extent of the damage thoroughly for your insurance company. Include close-ups of affected areas and damaged belongings. Mark the highest water level to help assess the extent of damage.
• Use pumps to begin draining water: Submersible pumps are ideal for removing large amounts of water. Shop-vacs can help with smaller amounts.
• Remove standing water: Use buckets, mops, and towels to remove remaining water.
• Open windows and doors: Increase air circulation to aid drying and prevent mold damage.
• Remove damaged items: Discard anything severely waterlogged or contaminated - mold can quickly develop.
• Professional help: For extensive damage, contact a professional restoration company. They have specialized equipment and expertise.
• Repair leaks and damage: Fix any broken pipes, cracks in the foundation, or other structural damage.
• Replace damaged materials: Replace water-damaged drywall, flooring, insulation, etc.
• Address the cause: Fix any identified plumbing issues, improve drainage, or address other contributing factors.
• Waterproofing: Consider waterproofing your basement to prevent future flooding or hire a professional to give advice.
• Contact your insurer: Report the flood to your insurance company as soon as possible and provide them with the documentation you've gathered.

How to submit a claim for basement flooding

Submitting a claim for basement flooding involves several steps. The process may vary slightly depending on your provider, so always refer to your policy and contact your insurer directly for specific instructions. Here is an overview of what to expect during the process:

• Report the flood: Don't delay; contact your provider as soon as possible after the flooding occurs. Most policies have time limits for reporting claims. Be prepared to provide basic information about the flood, such as the date, time, and a brief description of the damage.
• Obtain a claim number: Your insurer will assign you a claim number, which you'll need for all future communication. Keep copies of all emails, letters, and phone call notes related to your claim.
• Document the damage: Thoroughly document the damage with high-quality photos and videos. Include close-ups of affected areas, damaged belongings, and the overall extent of the damage. Make a detailed list of all damaged or destroyed items, including their estimated value and purchase date (if possible). Keep receipts if you have them.
• Complete the claim form accurately: Your insurer will provide you with a claim form. Complete it accurately and thoroughly, providing all requested information.
• Submit supporting documentation: Include copies of your policy, photos, videos, inventory list, and any other relevant documents. Be aware of any deadlines for reporting claims or submitting supporting documentation.
• Schedule an inspection: Your provider will likely send an adjuster to inspect the damage. Cooperate fully with the adjuster and answer their questions honestly.
• Provide access to the property: Allow the adjuster access to the affected areas of your home.
• Be prepared to answer questions: The adjuster will ask questions about the cause of the flood, the extent of the damage, and your efforts to mitigate the damage.
• Review the settlement offer: Once the adjuster completes their assessment, you'll receive a settlement offer. Carefully review the offer to ensure it covers all your losses. If you disagree with the settlement offer, you can negotiate with your provider.

Customize your coverage for basement flooding risks today

Always carefully review your specific policy, as exclusions differ among insurers and policies. A thorough understanding of your policy as a homeowner is crucial. If you reside in an area prone to flooding or have a basement, consider obtaining additional protection. The most effective way to clarify your coverage is to contact your provider.

If you are looking to learn more about your policy and what is excluded from a claim, speak with our brokers today. Our top rated customer service team is ready to answer any questions and help you customize a policy for your needs.