Do you have a sump pump in your home or business? If you do, you need to know what your insurance policy will and will not cover in terms of resulting property damage.
If your sump pump fails resulting in water damage, it is likely excluded from coverage in most homeowner and commercial policies. Homeowners can get some relief through a sump pump endorsement on their policy. This could get you anywhere from $2,500 to $5,000 (or possibly higher) in coverage for sump pump related damage. If the sump pump fails during heavy rain and causes significant water damage, you might be in trouble.
A sewer backup is a different issue. A sewer “backup” refers to a reverse in the flow of direction by the sewage liquid. Sewer backups are excluded from coverage on pretty much any policy. As with sump pumps, you can purchase an endorsement specifically for sewer backups that will provide coverage. These endorsements are intended for sewer backups that happen off premises – usually out on the street where the building stands. This type of event could stem from city workers cleaning the main sewage line in the street. When flushing water through that line, it could cause water or sewage to end up in your basement.
In the above example, we see a reverse in the flow of direction by the sewage liquid. However, a building could have a blocked line on the premises. If a child flushes a tennis ball into a toilet and the line becomes clogged, this constitutes an overflow of the plumbing system. This is different from a sewer backup, and makes an easier argument for coverage. Be careful – carriers have been known to try to call that a sewer backup and deny coverage.
In addition to these attempts at denying coverage, carriers are also changing the verbiage in the insurance policies themselves. Historically, when there was a blockage on the premises and a report from a plumber, there would be no problem getting carriers to agree to cover the damage. But with recent changes in policy language, carriers are much more inclined to deny coverage and force policyholders to fight to get coverage.
This is another example of the value of reading the full policy. Know your coverage, understand the relevant language, and see if you can get endorsements as needed to protect your property. RTFP!
