When your systems and appliances break down, home warranty plans promise peace of mind. Most options cover damage from sudden failures, like a burst pipe. However, they often exclude slower leaks or significant flooding.
As your resident insurance specialist, I want to help you understand what these services typically cover for water damage and the exclusions that apply. You'll be equipped with the knowledge to pick the ideal policy to protect your home and wallet.
» Take these steps to repair water damage in your house.
What Is Water Damage?
Water damage is caused by water intruding into your home, whether from bursts, leaks, floods, or other sources. It ruins flooring, drywalls, wood, and other materials. Water leakage can breed mold, mildew, and bacteria if left untreated.
These fungi multiply across surfaces, releasing toxic spores into the air. This causes health issues like fatigue, breathing problems, and coughing. That's why it's essential to identify and prevent mold growth and mildew before it spreads.
Standard homeowners insurance leaves your property vulnerable since it only covers damage from specific disasters like hurricanes or tornadoes. But companies like Choice Home Warranty offer extra security to repair your belongings.
How Home Warranties Work
Think of a home warranty like insurance for breakdowns. For a monthly fee, it'll save you money on repairs or replacements when your appliances inevitably fail from everyday use. You get compensated for items (stipulated in your contract) like your AC unit, pipes, or refrigerators.
These policies usually provide:
- HVAC system replacement services
- Plumbing system repair companies
- Electrical system maintenance
- Kitchen repair and replacement coverage
- Appliance coverage for items like stoves, microwaves, and ovens
Do Home Warranties Cover Water Damage?
No, not directly. Home warranties cover the repair costs to fix the source of moisture damage, like a burst pipe or a leaky refrigerator line. In other words, the warranty pays the technician to make those fixes.
But what about the resulting damage to your walls, floors, or other areas? That's where the difference between home warranty and homeowners insurance comes in. You can submit a claim with the insurance policy holder, and the service will then cover repairs and replacements of damaged items.
Home Warranty Water Damage: What's Covered
When choosing a plan, check if it covers flooding. Basic packages often exclude this, so you may need to pay extra. Services like Select Home Warranty and American Home Shield typically cover damage from:
- Burst pipes or faulty plumbing fixtures
- Malfunctioning appliances like dishwashers or washing machines
- Issues with water heaters
- Leaking roofs
- Septic tanks
- Pumps and sump pumps
Exclusions and Limitations for Water Damage in Home Warranties
Be Aware of Pre-Existing Conditions and Damage
Damage that happened before the policy term started usually isn't covered. Even if you purchased the home recently, any pre-existing conditions are typically excluded from your home warranty plan.
Don't Forget About Policyholder Negligence
None of us love home maintenance, but with a home warranty, you must stay on top of basic upkeep and repairs. If issues crop up, address them promptly.
If you let problems slide or ignore leaks for too long, coverage can be denied for the eventual damage. Knowing the lifespan of common household appliances helps gauge when replacements need to happen.
The Impact of External Factors
Basic home warranty plans usually exclude flooding, storm, and groundwater damage. Consider purchasing extra flood insurance or sewer backup coverage for better protection against water leakage in a disaster scenario.
What About Secondary Damage, like Mold?
Your home warranty likely won't cover mold removal or other secondary effects from initial water damage. Mold and mildew growth are often categorized separately from the original covered plumbing issue or leak.
Specific Items Might Not Be Covered
Systems like outdoor sprinklers, pools, and hot tubs may also be excluded from home warranty coverage. They're considered luxury amenities rather than essential home systems. Remember to double-check your policy and ask questions before signing up for a service like Liberty Home Guard.
Consider Coverage Limits
You'll often find a cap on payouts for water damage repairs or replacements. For instance, your home warranty may only cover up to $1,500 to fix your plumbing system. If the repair costs exceed this amount, you'll be responsible for paying the difference out of pocket.
7 Pro Tips for Protection Against Water Damage
When choosing a home warranty, keep the following tips in mind:
- Prioritize plans with comprehensive coverage for water damage from various sources like appliances, plumbing, and roof leaks.
- Understand the policy coverage limits and exclusions that apply. Purchase add-on coverage if needed.
- Consider service fees per visit and overall annual costs to find the right balance.
- Research the reputation of the warranty provider and the ease of their claims process.
- Look for a financially stable company like Home Warranty of America that can pay claims.
- Seek out flexible cancellation and renewal policies.
- Read the fine print and ensure transparency from the provider on what is and isn’t covered.
How to Prevent Water Damage
It's best to take proactive measures to prevent issues. You can:
- Maintain all plumbing fixtures, supply lines, and connections.
- Replace worn-out hoses and fittings, inspect appliances like dishwashers for leaks, and immediately repair any identified problems.
- Install leak detection systems that detect spills early and automatically shut off the water supply.
- Keep gutters and drainage areas clear to direct water away from the home’s foundation.
- Regularly inspect the roof for damaged, cracked, or missing shingles and deteriorated flashing around vents and joints.
» Follow these tips to file a successful home warranty claim.
Securing Your Home Against Water Damage
Between 2019 and 2020, home equipment costs rose from 3.3% to 3.8%. This means you're paying more for maintenance. Home warranty plans with fixed monthly payments can help offset rising expenses.
However, home warranties do not cover everything. But reliable companies like Home Service Club still protect you against expensive repairs your policy leaves out. If you know what's not covered and use home systems protections as a backup, you'll be better prepared for surprise water damage.
» Make sure to ask these questions when purchasing a home warranty.
Sunday Odudu, a top 10 writer and an expert in home warranties, has over a decade of experience in sales and public administration. As a seasoned insurance producer and former lead renovation specialist, he has collaborated with start-ups, global corporations, and governmental bodies.
