Schaub Team Blog

Will Insurance Cover Water Damage in a Finished Basement?

Posted by Dwight, ATI Restoration on Nov 22 , 2021 - 11:41 am

Finished BasementIf you are a homeowner, protecting your basement from floods is a key priority, especially during certain times of the year. Any form of water damage in your basement is a catastrophic event that can cost you money and comfort and may even introduce serious health issues. 

To minimize the cost of damage, you always want to have your basement insured from water damage. Choosing the right insurance coverage is key for a finished basement, i.e., one with ceilings, walls, and floors like any other room in the house. This will give you and your loved ones some peace of mind in case of an unexpected appliance failure or overflow from a sink, pool, etc.

Even then, getting your insurance to cover the cost of water damage might take time. Below is a detailed overview of the common types of water damage to basements and how you can tell if your insurance will cover it.

When Does an Insurance Company Cover a Flooded Basement?

This is a common question among many homeowners who often find themselves cornered by a basement flooding misfortune. Usually, your basement would flood for many reasons, some natural and unpredictable, while others may be human-related but unintentional. Your homeowner insurance company may or may not cover water damage due to either of the two causes.

Here are the basement flooding instances that are covered by the standard homeowners’ insurance policy.

Floods Due to a Broken Appliance

Your insurance policy will cover water damage caused by a faulty appliance such as an AC unit, washing machine, or refrigerator located in your basement. But for the insurance to cover the damages, they will first prove that the malfunction wasn’t due to a lack of maintenance. If the appliance were truly faulty, the insurance would cover the cost of the damage due to the flooding but not the cost of the new machine. 

Floods Due to Burst Pipes or Leaking Water HeaterLeaking Water Heater

During cold winters, the water freezes, a home’s pipes may burst due to rapid contraction and pressure build-up. Any pipework that bursts within your basement and leads to flooding is typically covered. However, the insurance company will need to ascertain that you lived in the home when it flooded. The only exception to this is if the house was still under construction while you were away. For instance, if you left your home heated and all the water points turned off while away on vacation.

Similarly, a leaking appliance such as a water heater is covered by a homeowners’ insurance policy. However, the leaks should be due to a malfunction and not neglect. If the insurer finds proof of poor upkeep and maintenance, your claim could be denied.

Overflowing bathtubFloods Due to Accidents 

Many homeowners would describe every flooding event as an accident, but the insurers should be very keen on their choice of words. Water damage caused by floods due to an overflowing pool, tub, or sink is considered “sudden and accidental,” and the insurer will cover the cost of the damages caused. 


When insurance Doesn’t Cover a Flooded Basement 

On the other side of the basement flooding mess are events and incidents not covered by your standard homeowners’ insurance policy. Here, you either need to buy additional insurance coverage or take extra precautionary measures to minimize the chances of such events occurring.

Here are the situations not covered by a standard home insurance policy:

  • Rising water due to heavy rains or storms – here, you’ll need flood insurance coverage, which, in most cases, is not as comprehensive. The best defense is to have a highly effective sump pump to push water out in case of such incidents. You can also choose to insure your sump pump with additional sump pump coverage in case of pump malfunction.

  • Underground water seepage – if the ground becomes saturated with water after heavy rains and the water seeps into the basement, your insurer won’t cover the damage. The best solution or defense is to ensure your home’s foundation is solid and up-to-date with all inspections.

  • Sewage Backup – your external sewer may back up into your home, bathroom, or basement, and the insurance won’t cover the resulting damage. Most additional insurance for sewage covers only up to $10,000, which is limited protection, considering the high repair costs running in the hundreds of dollars. 

Home Owners InsuranceGet the Expert Help You Need 

Whether your insurance will cover the water damage in your basement or not, you’ll still need to fix the problem at the end of the day. Over the years, it has become the norm for homeowners to contact the insurance company and report the claim before calling in the renovation company. This helps avoid potential conflicts if the renovation is done and the insurer tries to cry foul. 

Even then, fixing the problem and restoring normalcy in your basement is your responsibility. This is why you want to partner with a full-service damage restoration company that will go beyond water damage renovation to ensure every corner of your basement is reinstated to the pre-loss condition.