Will Home Insurance Cover You for Water Leaks?

Homeowners insurance does more than just protect a property; it protects the homeowner's checking account balance, too. That's because when something goes wrong at home, the insurer should pay to repair the issue or pay to replace the property if it is destroyed. The property owner does not have to cover all the costs themselves and deplete their assets.

Home insurers don't necessarily cover every single disaster though. One big question homeowners need to know the answer to is whether home insurance will cover water leaks. Water damage repair can cost anywhere from $3.75 per square foot to $7 per square foot on average (according to Angi), so it could be a real financial mess if a home is affected by a leak and insurance won't cover it.

Here's what property owners need to know about when home insurance will pay out for water leaks.

When are water leaks covered by homeowners insurance?

Homeowners insurance may provide coverage for water leaks -- but not in all circumstances. In order for a homeowners insurance policy to cover damage resulting from a leak, the incident typically must have been a sudden and accidental one. For example, if the water line to the refrigerator breaks or if a pipe suddenly bursts in the home, this would be the type of situation where insurance would typically provide coverage.

Homeowners insurance policies would not pay for damage caused by deferred maintenance or negligence though. If a property owner noticed a leaky faucet, toilet, or shower and just chose not to fix the issue over a long period of time, any resulting damage would be their responsibility to pay for.

Likewise, if a leaky roof caused damage over time because the property owner never repaired the shingles, this would be damage an insurance policy would not protect against.

Home insurance policies also do not cover damage resulting from floods. Those who want to be protected against flooding would need to get a separate flood insurance policy through FEMA or a private insurer.

Having the right home insurance coverage -- and understanding your coverage -- is critical

It is important for property owners to know the limits of what their insurance is going to do for them. In general, most policies either name specific causes of damage they will provide protection against (these are named peril policies) or cover all causes not specifically excluded (these are open peril policies). But neither named peril nor open peril policies will pay for damage due to negligence or due to flooding caused by acts of nature (like a hurricane).

Homeowners don't want to be caught off guard by not understanding the details of their insurance policy or what it will pay for. It's always best to ask an insurance agent or the insurance company directly what types of perils are -- and aren't -- covered so there are no unpleasant surprises.

How can you avoid an expensive disaster at home?

Property owners should not only take responsibility for putting the right insurance in place, but also make sure they are maintaining their property and responding appropriately to potential causes of damage. A water leak is a big risk to a home, so if you notice something amiss with your plumbing, you should take action quickly and be prepared to pay for the repairs.

Consider saving money for home maintenance in a separate savings account so you're ready. This way, a minor disaster doesn't have to become a major one that an insurer won't pay up to fix.