Understanding Your Insurance Coverage When It Comes to Water Damage

When water damage strikes, the last thing you want to deal with is confusion over your insurance policy. Unfortunately, many homeowners don’t realize their coverage may fall short until it's too late. At Peerless, we’ve seen it time and again: flooded basements, unexpected repair costs, and policies that don’t come close to covering it all.

Let’s break down what you need to know before the water starts to rise.

 

Many Homeowners Are Underinsured for Water Damage

One of the most common types of water damage we see comes from sump pump failure, whether your pump can’t keep up during heavy rainfall, it malfunctions, or you lose power in a storm.

While some homeowners carry a sump pump endorsement, it’s important to understand that this endorsement is limited in what it covers. Most policies offer $5,000 or $10,000 in additional coverage, which may sound helpful but often isn’t nearly enough if you have a finished and furnished basement.

Here’s why: Water damage expenses add up fast. Beyond just removing the water and drying process, you may need:

• Drywall and flooring repair or replacement
• Furniture restoration or replacement
• Replacement for anything stored or sitting within the bottom 6 inches of your basement that is affected by the water (appliances, personal belongings, stored items)

In many cases, homeowners run out of insurance coverage before they even get to reconstruction, let alone replacement of personal items.

 

What Does a Sump Pump Endorsement Actually Cover?

A sump pump endorsement typically covers water damage caused by your sump pump failing or being overwhelmed. But here's the critical detail: It usually does not cover damage from seepage or leaks through a block wall or cracks in your foundation (another highly common cause of water damage in a home).

If water enters your home through these vulnerable areas, it’s often considered “groundwater intrusion” or “seepage” which most policies specifically exclude, even with the endorsement in place.

 

Be Proactive: Test Your System and Plan Ahead

To reduce your risk and limit potential damage, we recommend:

• Speak with an agent to make sure you are properly covered
• Regularly testing your sump pump to ensure it works properly before storm season
• Installing a water-powered backup pump that activates when your primary system fails or loses power
• Elevating furniture and important items in your basement or storing them in waterproof containers

 

Know Your Rights as a Policyholder

Maybe one of the most important facts to know in the event of a loss is that your insurance company cannot require you to use a specific restoration company or contractor. While they may strongly suggest a preferred vendor (often the large national chains), the choice is always yours. Do not ever let them tell you that you HAVE to use anyone! 

At Peerless, we believe in doing what’s right for the customer, not what’s easiest for the insurer. We’ve proudly served Central Illinois since 1945 as your local IICRC certified restoration company, and we’ll be here when you need someone local you can trust.

 

Protect What Matters

No matter how prepared you are, flooding can happen fast, and insurance can be confusing. But when you take the time to understand your policy, test your equipment, and choose a restoration team you trust, you’ll be better prepared for whatever comes your way.

Our team is available 24/7 to help assess the damage, begin mitigation immediately, and guide you through the restoration process. We understand how overwhelming it can be, and we're here to make sure you're never facing it alone.

 

 

** Peerless Cleaning & Restoration Services is not an insurance provider or licensed insurance professional. The information in this article is based on our experience and observations from assisting customers with water damage over the years. Coverage options, exclusions, and endorsements vary widely by insurance provider and individual policy. For questions about your specific coverage, we strongly encourage you to contact your insurance agent or provider directly. **