By Steven M. Ladd
The Horan Companies
A couple of days ago, our office experienced the aftermath of a water main break. Right on the intersection of Denio and Oswego streets, water began streaming out of the manhole. It then came right into our basement up through the utility sink drain. It was not a slow flow, but a rapidly flowing waterfall over the basin and onto our floor. Fortunately within a short period of time, the water to our building was shut off and the repair work beneath the road got underway. As just the second business within the plaza, we were lucky to have the backup isolated to our basement. Others farther down our sidewalk were not so lucky, as they experienced immediate damage to their primary business area.
That event got me thinking about how a water claim is handled in the event of a loss. It also got me thinking that many business and homeowners likely do not realize how a situation like that one would be covered.
In the insurance business, this water main break led to what is known as a sewer/water backup peril. It’s defined as damage that occurs from water backing up and overflowing from places meant to push the flow away from the building. Sump pumps, sinks, floor drains, and toilets are all examples.
Water backup is not included in a standard home or business insurance policy. In order for there to be coverage, it must be endorsed separately. The available amount of coverage that can be purchased varies widely depending on the insurance carrier. Many will cap it at $5,000 while a select few will allow their policyholders to go as a high as the full replacement value of the house/business. The endorsement carries a separate deductible that may differ from the primary policy deductible. Typically, you can tell if you have this coverage by viewing the declarations page of your homeowners policy. If you see it listed along with a specific premium amount, then consider yourself covered up to the provided limit.
This important coverage is very specific and only includes backup. It should not be, confused with flood insurance. Flood is an excluded peril, and would need to be purchased as a separate policy altogether. It also does not apply to seepage or any other type of exterior water intrusion.
Don’t assume you have water/sewer backup coverage. It would not be added without your permission. Review your policy carefully. If you have a finished basement, or store a lot of belongings in it, consider the cost to replace it all. If you are on a slab your risk of loss could be much higher. Either way, the cleanup alone is expensive and unpleasant.
We are thankful not to have lost any time or property. Hats off to the crew that responded, located and fixed the break and even put the road back together in less than a day and a half. Well done.
Steve Ladd is an insurance agent with Horan Companies. Contact him at (315) 635-2095 or [email protected].
