Insurance Coverage and Warranties

Insurance coverage

In its standard form a Homeowners Policy will not have coverage for a sump pump, or any existing drainage system. This is very often overlooked by new homeowners. A standard Homeowners Policy will not cover any water that is: backed up through any drain, sink discharge, toilet, or sump pump etc. Most people are stunned that their agent did not tell them they are not covered for this. The reasons are clear.

  1. These claims are among, and in some areas, the highest claims losses a homeowner will require.
  2. Agents try to be competitive in their estimates and selling this coverage to someone who has not experienced the problem first-hand seems like ‘overselling’ to the agent or client and so agents dont mention it.
  3. Some agents commissions are affected by claims on a policy and these are common and expensive claims.

Policies before 1998 tended to have better coverage in this regard and they were set with normal policy limits. If you insured your home for any structural or replacement damage for $300,000 you would be covered the same for a flooded basement. Now the caps on these policies are set to $5,000 to $20,000 tops. Content and structure coverages are counted together preventing enough coverage to replace, repair, or restore lost items. Simply, if your basement is finished you need more than $20,000 in coverage in the event that there is an accident.

If you do have a sump pump rider or separate water back up policy it often will cover back up or failures of sump pumps, drains, or toilets. But the same policy will not cover your personal property.

Flood Insurance coverage is when the water pours over the wall i.e. there’s boats in the street. This is insurance designated for a flood zone, or very low lying areas. If you live in such an area it is disclosed when you buy your house and you must have insurance. You most likely will not have a basement if you live in one of these areas.

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Most manufacturers warranty from 3 to 7 years a few offer lifetime warranties yet these are often never less than a 3/4 HP. Typically too much for residential use as this can apply too much stress to the 1.5”-2’ discharge line. There are virtually no waterproofing companies that offer lifetime warranties past the stated manufacturers warranty. These lifetime warranties are often based on the system and not the pump. Unfortunately, these systems rely pretty heavily on the pump performance. We only know of two companies that offer lifetime warranties on the pump past the manufacturer;  Value Dry and Basement Detective and of these only Basement Detective covers the replacement labor.