Many people think they are automatically covered for Sewer Backup at their investment property. However, according to the Insurance Information Institute (I.I.I.), most homeowners and business insurance policies do not cover Sewer Backup unless that specific coverage is added to the policy. As it may or may not be included, you have to study your specific policy to know if you have Sewer Backup coverage. This is true whether one has a Basic, Broad or Special Form policy too.
Welcome to our “Is It Covered?” series. For a fuller introduction of the series, read HERE. We hope these quick reads will help you increase your understanding of your insurance coverage, clear up confusion and help you avoid preventable losses! Please bear in mind that insurance policies may vary, so always check your own policy for language specific to your covered property. If you have coverage questions, don’t hesitate to call your agent who will be happy to assist you!
What are some of the common causes of Sewer Backup?
- Blockages due to tree roots: Over time, tree and shrub roots can cause damage to sewer lines. A small crack can become a large problem as roots seek water sources. Trees that are the source of the problem may be from your yard or under city jurisdiction. To determine who is responsible, the city can take root samples and find out which trees are causing the issue and therefore, who needs to fix it.
- Sanitary main: Blockages can occur in city mains and if not detected in time, sewage from the main can back up into homes and businesses through floor drains. If water is entering the basement rapidly, report the problem immediately to city public works so they can investigate.
Is “Sewer Backup” considered Water Damage or Flooding or is it its own peril?
Sewer Backup is defined as “water that backs up or overflows from a sewer, drain or sump.” (ISO) Drains and sewers can back up during storms. So, what you or I call a “flooded basement” may or may not technically be “flooded” when it comes to insurance – it all depends upon how the water enters the dwelling. That stated, investors will want to make sure that any drainage systems in basements are well-maintained and that sump pumps are regularly tested to help avoid water damage from Sewer Backup. Though a sewer backup involves plumbing, it is a separate peril on its own and limited coverage may or may not be available, depending upon the insurer.
How does “Sewer Backup” differ from a “Flood”?
A Flood may occur when water from natural sources such as rivers and lakes breach their banks during heavy rains or when the ground is over-saturated with water and causes the excess to seep through foundations or other vulnerable parts of the structure. One of the key components of a Flood is “rising waters” but that is different than water and other items that flow in from sewer drains. Important: Flood coverage is never a part of the Basic, Broad or Special coverage forms – it is set up as a “stand-alone” policy and is purchased separately from your other Property and Liability coverages.
Is there a way to add coverage for Sewer Backup, and does it cost extra?
Some carriers offer the ability to add Sewer Backup coverage for an additional cost. It is not always the cheapest coverage to add, so you might want to consider a higher deductible for this peril to offset the additional premium. Most carriers can assign a unique deductible for this peril alone, much like they do for wind/hail in some areas of the country, named windstorm, earthquake and/or flood. Within the Program, our Tenant Protector Plan (TPP) is a way to buy back limited sewer and drain backup coverage for occupied properties. You can read more about it HERE.
What does the technical lingo of this exclusion look like in my policy?
Sample policy language may look like this:
“We will not pay for the loss or damage caused directly or indirectly by…Water:
1) Flood, surface water, waves (including tidal wave and tsunami), tides, tidal water, overflow of any body of water, or spray from any of these, all whether or not driven by wind (including storm surge);
2) Mudslide or mudflow;
3) Water that backs up or overflows or is otherwise discharged from a sewer, drain, sump, sump pump or related equipment;
4) Water under the ground surface pressing on, or flowing or seeping through:
a) Foundations, walls, floors or paved surfaces;
b) Basements, whether paved or not; or
c) Doors, windows or other openings; or
5) Waterborne material carried or otherwise moved by any of the water referred to in Paragraph 1, 3 or 4, or material carried or otherwise moved by mudslide or mudflow.
This exclusion applies regardless of whether any of the above, in Paragraphs 1 through 5, is caused by an act of nature or is otherwise caused. An example of a situation to which this exclusion applies is the situation where a dam, levee, seawall or other boundary or containment system falls in whole or in part, for any reason, to contain the water.”
*As insurance policies may vary, please check your own policy for language specific to your covered property.
How much can this type of damage cost me?
Sewer Backup losses can vary from a few hundred dollars to tens of thousands depending upon the extent of breakage or tree root intrusion.
What can I do to protect myself?
First, know what is in your policy: Read the sections of your insurance policy that address Sewer Backup. It is important to know both what you are and are not covered for. If you don’t understand your coverage or have questions, don’t hesitate to ask your agent who should be happy to help you!
Properly dispose of grease: Do NOT pour cooking oil down the drain. The buildup will likely lead to an eventual clog in your system. Oil should always be poured into a heat-resistant container and properly disposed of.
Properly dispose of paper products: Any type of paper product that is slow to biodegrade such as paper towels, disposable diapers and feminine products should never be flushed down the toilet. These are also to likely cause a clog.
Use legal plumbing connections: Do not connect flood control systems such as French drains or sump pumps to your sanitary system. It is illegal and debris and silt will clog your line. Have a licensed plumber help you correct any illegal connections.
Install a backwater prevention valve: This fixture prevents sewer backflows and is installed into sewer, and sometimes drain, lines in the basement of the property. These valves allow sewage to go out, but not to come back in. Check with a licensed plumber for assistance in installing one.
Sump Pumps: Make sure your sump has a back-up battery in case of a power outage. Excessive rain, downed trees and other plant debris, back up city drains, causing you additional drainage issues. If there is a catastrophic flood there may be nothing you can do but keeping your sump hummin’ may save you a lot of headache and money in a more localized flash flooding event.
Make sure your tenant understands their personal property isn’t covered by your insurance: Include a clause in your lease requiring tenants to carry renters insurance – and make sure you enforce it. Let them know any insurance you carry on the property as the owner does not apply to their personal belongings. Impress upon them the importance of reporting any hazardous conditions on the property to you or your property manager immediately. You may want to include a section in your lease where the tenant acknowledges their understanding of these items. Another option is to purchase a product like our Tenant Protector Plan that does provide contents coverage for your tenant.