What to Know About Getting Insurance Money to Cover Water Damage to Your Home

If you have water damage in your home, your homeowner's policy may help pay for repairs. The first thing you'll want to do when you're allowed back in your home is to meet with a claims adjuster who will inspect the damage and offer a settlement amount. Here are a few things to know about getting insurance to pay for water damage.

Source of Water

One thing the adjuster wants to know is what caused the water damage. If the water came from outside your home, whether it was due to a flood or a backed up sewer, your standard policy will probably not cover any damages at all. A typical homeowner's policy covers water damage caused by incidents that happen inside the home, such as a malfunctioning washing machine, or a busted faucet over the sink. However, you'll want to check your policy carefully. If you added extra insurance that covers sewer and septic tank problems, or if you added a flood insurance policy, then you may get coverage for those situations as well.

Type of Damage

The adjuster also considers the type of damage. Your policy will probably pay if an internal, accidental incident caused a sudden rush of water that saturated your home. The policy covers damage such as buckled floors, damaged drywall, and mold removal. However, it won't necessarily pay for replacing the broken washing machine or whatever actually caused water to pour through your home. If the damage is due to lack of maintenance, such as leaky plumbing under the sink that went on for months, your insurance company probably won't pay to have the affected drywall and flooring replaced.

Receiving the Settlement

There are various ways to get your insurance money. Insurance settlements are regulated by your state, and each insurance company has its own procedures to follow as well. If you have a mortgage on your home, that comes into play too. Your insurance company may give you a small payment upfront to help with immediate expenses of staying in a hotel if necessary. The larger settlement may be paid to you, your mortgage company, or the damage contractor. If you have a mortgage, your lender wants to ensure the money is spent on making repairs, so they are probably named on your insurance policy to receive claim settlements. The money is then used to pay the damage contractor to make repairs, and the excess is given to you to replace damaged possessions.

Another option that helps you avoid paying out of pocket for repairs is to have the damage contractor you choose bill your insurance company directly. To do this, you'll need to complete paperwork that allows your money to be sent to the contractor instead of you. Or, if your house is paid off, you can elect to have the settlement sent to you directly and you can use it as you see fit to make repairs. Dealing with your insurance company is often confusing, especially when you're under stress due to major damage in your home. However, once you get everything in order, you can contact contractors to make insurance repairs.