Water Exclusion Clause

A water exclusion clause is a restriction in homeowners and renters insurance policies that denies coverage for some water-related claims. Types of water damage that are likely to fall under a water exclusion clause include damage caused by flood, tsunami, standing water, groundwater and drain or sewage backup.

A water exclusion clause is common in most insurance policies. The reasoning is that only specific areas are prone to water-related natural disaster events, such as floods, tidal waves or tsunamis. This clause is one of several types of exclusion clauses found in homeowners and renter policies. Other standard exclusions include earthquakes, certain government actions, landslides, nuclear hazards and wars.

However, most policies do have provisions that cover damage caused by fire, wind, vandalism, theft and falling objects, among other types of damage. Notably, homeowners and renters may be able to add some types of water coverage excluded in the standard by purchasing a rider. The expensive nature of water damage gives homeowners and renters reasons to find a policy that includes alternative coverage options.

Water damage clauses are standard in homeowners and renters insurance policies, too. Those clauses state that the insured is covered for water damage that occurs for specific reasons, such as frozen pipes. Water damage clauses are therefore usually included in most policies.

Flood insurance is often subject to debate, particularly in terms of what actually constitutes a flood. Flood insurance is a policy that protects property owners from water damage to the structure and contents of their property. While flood insurance can be purchased through many different insurance companies, all policies are federally regulated, so the same policy costs the same amount no matter which company it is purchased through.

Because typical hazard insurance policies do not cover flooding, the occupant must purchase a separate policy for protection against flood damage. For properties in high-risk areas, lenders sometimes require mortgaged homeowners to carry flood insurance to protect the structure. It is up to the homeowner whether to purchase additional coverage for the property's contents, such as electronics, furniture and clothing.

Flood insurance policies are available for homes and commercial properties. Homes financed by a federally backed lender require flood insurance if they are located in a special flood hazard zone prone to significant damage. Renters can also purchase flood insurance policies that cover their personal property in a single-family home, apartment, condominium or business property.