Waking up to a flood in your basement due to a faulty water heater is anything but pleasant – especially after you realize your floor is damaged. One of the first questions you’ll likely ask yourself is, does homeowners insurance cover water damage?

In this scenario, your standard homeowners insurance policy will cover the costs associated with the damage. However, not all types of water damage are covered.

Under most standard home insurance policies, if water damage occurs suddenly or accidentally from a source inside your home, such as a busted pipe, it will likely be covered by your homeowners insurance. If the water comes from outside your home, it will not be covered by your standard policy. However, you can seek special protection from flood-related damages with flood insurance, which is a separate policy that can make a smart addition to your existing home coverage.

Types of water damage not covered by homeowners insurance

Whether your homeowners insurance will cover water damage depends on the source of the damage. Here are three instances in which your homeowners policy will not provide coverage:

1. Maintenance problems that have not been attended to. For example, your homeowners insurance will likely not cover water damage that is the result of a faulty sink that has been leaking for several months. 
2. Repair or replacement of the actual source of the water damage. If your washing machine caused water damage to the floor of your laundry room, your homeowners insurance will not cover the costs to repair or replace the machine. However, it will typically cover the costs to repair your floors.
3. Issues resulting from a flood. Flood damage will not be covered by your homeowners insurance policy and will require separate flood insurance coverage. 

Water damage vs. flood damage

It’s important to keep in mind that water damage and flood damage are two different things. Distinguishing the two can be confusing, which is why it’s a good idea to read your insurance policy closely. The primary difference is that with a flood, the water comes from a natural source. So if you live in an area near a large body of water that could potentially overflow, or if your neighborhood is prone to extremely heavy rain, flood insurance may be a good idea.

To learn more about homeowners insurance to protect your house and your belongings, take a look at our homeowners coverage page.