Every house faces the risk of water damage of some kind sooner or later, so taking precautions and being prepared is necessary. A burst tap or overflowing sewer can cause water damage, as can a leaky dishwasher or washing machine. Leakage and seepage of water, often called gradual damage, can happen in a number of ways and can worsen over time, needing more significant repairs. As a homeowner, you should plan to inspect you home for gradual water damage every so often, as your home insurance policy may not cover repair costs, citing negligence or poor maintenance.
Accidental or sudden water damage, which can occur due to storms or floods, is usually covered by home insurance. In fact, settlements relating to water damage insurance claims account for a quarter of all home insurance claims, which is why insurers will regularly look to ascertain whether the damage may have been gradual.
As the homeowner, you will need to establish beyond doubt that the water damage arose suddenly and not gradually over time when making a claim. At the same time, you may not be legally permitted to repair the plumbing in your home, and you will have to negotiate with your insurer before any serious repairs can be done.
Important information about claiming water damage on home insurance
If you are concerned about water damage in your home, consider reading the water damage clause in your home insurance policy's Product Disclosure Statement (PDS) before you purchase the policy. Home insurance coverage can vary wildly, and the terminology typically gives you the best indication of what a policy will cover. In the event of water damage, the usual phrase to look for is “escape of liquid”, although some insurers may refer to it by one of the following terms:
- “water or other liquid damage”
- “bursting, leaking or overflowing”
- “sudden and unexpected escape of liquid”, or
You may want to ask the insurer specific questions regarding the possible kinds of water damage. For instance, you may have an air conditioner from which water starts dripping after a few years of use. If this happens while you are travelling or otherwise not present at home, the walls and flooring of your home might already be significantly damaged by the time you return. Finding out at that point that your policy does not cover this type of damage can be frustrating.
How can you claim water damage on home insurance?
The first step you need to take when filing a water damage insurance claim is documenting the damage and listing the spots in your home where mould or rot has formed. You can then speak to your insurer and check if you can make the repairs needed to prevent further damage. In some cases, the insurance provider will ask you to wait until their insurance adjuster evaluates the damage, in order to establish that the damage is accidental. You may also need to prove that the damage could not have been caused by an incident that your policy does not cover.
Based on the adjuster’s evaluation, your insurer will negotiate a claim settlement with you and arrange for a contractor in their network to make the repairs to your home. Based on your policy, you may be able to arrange for a contractor by yourself and get a cash settlement from the insurer. In case you don’t agree with the adjuster’s evaluation, you may be able to ask an outside expert to inspect the damage to your home and negotiate with your insurer based on that evaluation.