The short answer: Yes, home insurance covers water damage from leaks, but ONLY if the leak is “sudden and accidental.” It specifically excludes damage from gradual leaks, maintenance issues, flooding, and sewer backups (unless you buy extra coverage).
This detailed explanation breaks down exactly what is—and isn’t—covered.
The Golden Rule: “Sudden and Accidental”
This is the key phrase in your entire insurance policy. Insurers draw a hard line between water damage that happens abruptly (an accident) and water damage that happens over time (a maintenance problem).
Your policy is designed to protect you from unforeseen disasters, not to pay for the predictable consequences of neglect or wear and tear.
- Sudden & Accidental (Covered): A pipe bursts, and water floods your basement. A dishwasher supply hose fails, ruining your kitchen floor.
- Gradual (Not Covered): A pipe under your sink has a slow drip that goes unnoticed for six months, causing your cabinet and subfloor to rot.
Scenarios That Are Typically COVERED
Your standard (HO-3) homeowners policy will generally cover the resulting damage from these types of leaks:
- Burst Pipes: This is the classic example. A pipe freezes and bursts, or an old pipe suddenly splits.
- Appliance Hose Failure: The supply hose to your washing machine, dishwasher, or ice maker suddenly ruptures.
- Overflowing Fixtures: A toilet accidentally clogs and overflows, or you forget a sink or bathtub is running and it floods the bathroom.
- Storm-Related Roof Leaks: If a windstorm or hailstorm damages your roof (a covered peril) and rain gets in as a direct result, that water damage is covered.
- Water Damage from Ice Dams: Ice dams (ridges of ice at the edge of your roof) can force melting snow back under your shingles, causing sudden water intrusion. This is typically covered.
Scenarios That Are Typically EXCLUDED
This is where homeowners are most often surprised by a claim denial. Your policy will NOT cover damage from the following:
1. Gradual Damage (Maintenance Issues)
This is the single biggest exclusion. Insurance views this damage as preventable. If a leak has been happening for weeks, months, or years, the resulting rot, deterioration, and mold are considered your responsibility.
Examples include:
- A slow, persistent drip from a faucet or showerhead.
- Water seeping through cracks in your foundation.
- Damage from failing caulk or grout in a shower, which lets water get behind the wall.
- A 25-year-old roof that leaks simply because it is old and worn out (as opposed to being damaged in a specific storm).
2. Flooding (Ground and Surface Water)
This is the most critical exclusion to understand. No standard homeowners policy covers “flooding.”
In insurance terms, a “flood” is any water that comes from the ground up and enters your home. This includes:
- Overflowing rivers or lakes.
- Storm surge from a hurricane.
- Heavy rainfall that pools on saturated ground and seeps into your foundation or under your door.
Protection from this type of damage requires a separate Flood Insurance policy, which is typically purchased through the National Flood Insurance Program (NFIP) or private carriers.
3. Sewer and Drain Backup
Your standard policy also excludes damage from water or sewage that backs up through your drains or is pushed into your home from a failed sump pump. If the city sewer main is overwhelmed by rain and sewage flows back into your basement, you are not covered.
The Solution: You must add an inexpensive endorsement (or “rider”) to your policy called “Water Backup and Sump Pump Overflow” coverage. This add-on is highly recommended for any homeowner, especially those with basements or lower levels.
The Most Confusing Part: The Damage vs. The Source
This is a crucial distinction that trips up many homeowners. Even in a covered claim, your insurance pays to fix the damage caused by the water, but it does NOT pay to fix the appliance or pipe that caused the leak.
- Example 1: Your 15-year-old water heater rusts through and bursts, flooding your finished basement.
- Your policy will pay: To tear out the soaked carpet, replace the ruined drywall, and dry out the space.
- Your policy will NOT pay: For the new water heater itself. The water heater failed due to age (wear and tear), but the damage it caused was sudden.
- Example 2: A pipe in your wall bursts.
- Your policy will pay: To cut open the wall to access the pipe, repair the drywall, and repaint the room after the plumbing work is done. It will also cover any flooring or furniture damaged by the water.
- You will pay: The plumber’s bill for the small section of pipe that he actually replaced.
A Note on Mold
Mold is a direct consequence of lingering water. Therefore, coverage for mold follows the coverage for the water.
- If the mold was caused by a “sudden and accidental” leak (like a pipe burst), your policy will typically cover the cost of remediation, but almost all policies place a cap (limit) on this coverage, such as $5,000 or $10,000.
- If the mold was caused by a “gradual” leak (like a slow drip) or flooding, the mold remediation is not covered.
What to Do Immediately if You Find a Leak
- Stop the Water. Shut off the main water valve to your house immediately.
- Mitigate the Damage. This is your duty under the policy. Move wet items. Call a 24/7 water mitigation/remediation company to start extracting water and setting up industrial fans and dehumidifiers. This prevents further damage and stops mold growth. Save all receipts.
- Document Everything. Take photos and videos of the damage before anything is moved or repaired.
- Call Your Insurer. Report the claim as soon as possible. They will guide you on the next steps.