Sewer-Drain Backup Losses Can Be Covered By Homeowners/Renters Insurance

A season of heavy rain has thousands of residents wading through soggy basements caused by sewer or drain backup. In some cases, homeowners will welcome the news that by taking preventative measures, their homeowners or renters insurance will cover such losses.

"Most companies offer sewer and drain-back up as optional coverage, meaning that it can be added to your policy as an endorsement," says Daniel J. Kelso, Ohio Insurance Institute (OII) president. "And because the loss potential from water backup in basements could be in the thousands, homeowners should take a look at this coverage before they actually need it."

A recent random check by the OII of various insurance companies finds the endorsement range to be reasonable for Ohioans, around $50, on average. Some insurers include this coverage as part of their deluxe or premium policy, but Kelso suggests that homeowners double-check how and where coverage applies.

According to the Institute, coverage limitations vary by company. One company, on its deluxe, all-peril policies, offers unlimited coverage on losses caused by drain and sewer backup. Some offer coverage up to the limits of the actual policy, and still other insurers limit the coverage to a specified amount such as $5,000 or $10,000 on combined personal property and dwelling losses. Other variations include full coverage if a sump pump fails to at least one insurer specifying what items it will cover in the event of such a claim.

"Consumers can take steps to minimize their losses, and should, even if there's a remote chance of this occurring," said Kelso. These include:

• Never store perishables or valuables in basements that you can't afford to lose or replace (i.e. photos, clothing, electronics, collectibles, etc.)
• Do not store any item near basement drains.
• Check storm drain lines to make sure they're clear of debris, roots, etc.
• If you do have some water seepage following storms, take corrective measures to alleviate problems in the future. For instance, install a sump pump or have a company that has expertise in waterproofing basements take a look at your situation to see if there's something that can be done to eliminate potential major losses. Most of these companies offer work guarantees. Also be sure to tell your insurer when such improvements have been made.
• Use shelving or store items several inches above the potential water level in order to prevent losses as well.
• Make sure your home's downspouts are extended away from the foundation in order to carry water away from basement walls.
• Grade the property around your home to drain water away from it.
• If you live on a flood plain or your property is prone to flooding, consider the purchase of a flood insurance policy.

The OII is a trade and public information association representing insurance companies and agent groups for the property and casualty insurance industry. Its primary objective is to help residents achieve a better understanding of insurance and safety issues.