Does Homeowners Insurance Cover Plumbing?

Why Homeowners Insurance Policies Don't Cover Plumbing Repairs

Insurers view plumbing systems as a homeowner's responsibility to maintain. As a result, they don't cover the breakdown of the actual system—just the ensuing damage. In fact, even damage coverage may be limited, depending on how it was caused.

An HO-3 policy (the type of policy most U.S. homeowners have) typically covers the following situations:

1. Accidental discharge or overflow of water or steam from within a plumbing, heating, air conditioning or automatic fire sprinkler system, or from a household appliance
2. Freezing of a plumbing, heating, air conditioning or automatic fire sprinkler system, or of a household appliance

While sudden plumbing issues are typically covered by insurance, plumbing problems that occurred over time due to lack of maintenance may not be. For example, if a rusty pipe or leaky dishwasher hose bursts after years of neglect, your home insurance is unlikely to pay for the damage. The sudden failure of a well-maintained pipe going to your water heater may be covered, however. Home insurance is intended to help in emergencies, not to substitute for regular maintenance.

Speak to Your Insurance Agent Before Filing a Claim

Before filing a home insurance claim for plumbing damage, talk to your insurance agent. For your claim to be covered, you'll have to pay out of pocket up to your deductible.

If the cost to repair your damage is less than your deductible, it may not be worth it to file a claim—especially since filing a claim can affect the cost of your home insurance premium. For instance, if your plumbing problem caused damages requiring only minor repair but your home insurance deductible is $1,000, filing a claim may not make financial sense.

Filing multiple claims for minor damages could drive up your homeowners insurance costs or even prompt your insurance company to drop you. Your insurance agent can help to determine if plumbing damage is worth filing a claim or not.

On the other hand, if a plumbing crisis ruined your entire ceiling, floor and electrical system, or will force you to leave your home while repairs are made, you should file a claim.

To help minimize the financial fallout from a plumbing disaster:

• Record the damage. Before you do anything, take pictures of the damage. They'll be useful should you file a claim. Note any items that were damaged or destroyed and their value or cost.
• Prevent additional damage. You don't have to wait for the claims adjuster to act. For example, you can help prevent mold and further damage by mopping up puddles of water, removing wet furnishings or rugs and drying the area with fans. However, don't throw anything away until the claims adjuster has inspected the damage.
• Get estimates for repairs. Ask licensed contractors for quotes. This can help your insurer determine the cost of repairs.

How to Prepare Your Budget for Plumbing Repairs

A plumbing emergency doesn't have to take you (and your bank account) by surprise. To prepare for plumbing repairs:

• Build an emergency fund. The average cost for plumbing replacement or repair work in the U.S. is $1,175, according to home improvement website Angi, but big jobs can cost $15,000 or more. Since damage from plumbing problems may not be covered by homeowners insurance, you should have an emergency fund that can act as a safety net.
• Plan for home maintenance. Budget funds for regular home maintenance, which can help you avoid plumbing problems altogether. Homeowners spend an average of $3,192 annually (or $266 per month) on home maintenance, according to Angi. Consider putting aside that much, or (as some experts suggest) saving 1% to 4% of your home's value per year.

  What type of maintenance should you perform? The Insurance Information Institute recommends you:

  • Inspect your hoses and faucets annually. Replace any that appear to be cracked or leaking.
  • Check the seal and caulking around tubs and showers.
  • Inspect pipes for cracks, leaks, rust or other signs of potential problems.
  • Consider buying a water leak monitoring and shutoff system.
  • If you live in an area with freezing temperatures, consider installing an emergency pressure release valve, which can help keep pipes from bursting.
• Be proactive. Take action as soon as you notice a potential plumbing disaster. A slow-draining sink or small leak in the bathroom could lead to costly damage if you ignore it. Repairing problems before they worsen can prevent you from having to file an insurance claim.
• Consider upgrading plumbing systems. Older homes often cost more to insure because their aging systems are more prone to failure. If you live in an older home, modernizing outdated plumbing could not only help prevent water damage but also save money on home insurance.

Home warranties may cover appliances and home systems, including plumbing, dishwashers, refrigerators, washers and dryers, that break down or wear out. However, the claims process can be difficult, you may have to pay high service fees for repairs and you may not get to choose the contractor who performs the repairs. If you choose to investigate home warranties, be sure you understand the warranty's specifics, restrictions and any costs you may incur.