Water back-up is one of the more confusing coverages in a homeowners’ policy. It involves more than the back-up of water, as overflow is mentioned in some of the coverages also. But what is a back-up, and how is it different from an overflow or discharge? All of these things come into play when there is a water damage loss, and what the cause of the water back up or overflow is may make a difference in whether or not there is coverage.
First let’s look at definitions. A back-up is an accumulation of water caused by a stoppage in the flow: something prevents the water from continuing down it’s path, so it is forced to reverse direction and go back the other way. A collapsed drain pipe can cause a back-up; water can no longer proceed down it’s normal course and is forced to change direction. A blockage can cause a back-up; the blockage prevents the water from going forward, and the water has to reverse itself.
An overflow is when the water exceeds it’s boundaries; the space is filled to capacity and water then spreads beyond it’s limits. A tub left running creates an overflow. The tub can no longer hold the water running into it, so the water overflows onto the floor and surrounding area.
A discharge is a flowing or issuing out; water coming from a pipe. A leaking pipe discharges water from the hole in the pipe; it is not a back-up or an overflow, it is simply water issuing from a pipe at the wrong spot.
The HO3 homeowner policy provides coverage for water damage that is the result of a discharge or overflow of a plumbing, heating, air conditioning, or household appliance if it is on the residence premises. This covers pipes that leak behind walls, floors, or ceilings; such as washing machines and dishwashers that overflow, toilets that overflow, or storm drains off premises that overflow due to high rains or floods. It is important to note that a sump, sump pump or related equipment, or a roof drain, gutter or downspout or similar equipment is not considered a plumbing system or household appliance. A discharge or overflow caused by a storm drain, water, steam, or sewer pipe is covered as well if it is off the premises.
The coverage is for repair of the damaged property-the walls, floors, tiling, and carpet, areas that got saturated and need to be repaired or replaced. Even the tear out of a wall, for example, to get to the leaking pipe is covered. What is not covered is the leaking pipe itself; a pipe leak is often caused by simple wear and tear or age of the system, and that is a maintenance item. However, even if the insured is hanging a picture and poles a hole in a brand new home and new pipes, the damage to the pipe is not covered. The exclusion for damage to the item causing the loss is all encompassing, and has no exceptions.
The policy specifically excludes water that overflows from sumps, sump pumps or related equipment or water that backs-up through sewers or drains. However this is where a lot of losses occur; sump pumps may fail or be unable to handle the flow of water during a severe storm or flood, and sewers or drains may back-up due to a stoppage in the flow. Overflows are excluded for sumps because that is a common cause of loss; the sump cannot handle the volume of water it receives, For example, if the drain backs up and overflows because of heavy rainstorms, that is not covered under the policy.
To add this coverage to your homeowner policy, there is a coverage called Water Back-up and Sump Discharge or Overflow endorsement. This coverage provides $5000 of coverage for back up through a sewer or drain or overflow or discharge of a sump, sump pump or related equipment, even if the equipment suffers a mechanical breakdown. For example, the sump pump motor burns out and the basement floods; there is $5000 of coverage for that damage. The coverage is for water or waterborne material, so coverage is provided for damage caused by items floating in the water. This coverage does not, however, increase the limits of liability for coverages in the homeowners’ policy.
This takes the problem of defining back-up or overflow out of the equation of certain losses, since the endorsement provides the coverage that is excluded in the main policy itself.