Water Damage Insurance: What's Covered

Most homeowners don't realize how much their insurance actually covers after water damage. Here's a plain-English breakdown of your coverage, your rights, and how the process works.

What your homeowner's policy covers

Standard homeowner's insurance (HO-3 policy) covers sudden and accidental water damage. This includes:

• Burst pipes — including copper pipe failures, joint separations, and pinhole leaks that cause sudden water release.
• Water heater failures — tank ruptures, valve failures, and connection leaks.
• Appliance leaks — dishwasher, washing machine, refrigerator ice maker, and other supply line failures.
• Toilet and plumbing fixture failures — supply line breaks, tank cracks, wax ring failures.
• AC condensate overflow — backed up drain lines that flood interior spaces.
• Accidental overflow — bathtub or sink left running.

What's typically NOT covered

There are specific exclusions to be aware of:

• Gradual damage — a slow leak under a sink that you knew about but didn't fix is not covered. The key is "sudden and accidental."
• External flooding — water that enters your home from outside (monsoon flooding, rising groundwater) requires separate flood insurance. Standard policies exclude this.
• Sewer backup — water backing up through drains requires a separate endorsement. Many policies offer this as an add-on, but it's not included by default.
• Neglected maintenance — if your insurer determines the damage resulted from failure to maintain your plumbing, they may deny the claim.

Your right to choose

This is one of the most important things to understand: you choose who handles your belongings.

When you file a water damage claim, your insurance adjuster may recommend or suggest a restoration company. Some adjusters work with "preferred vendors" or have existing relationships with specific companies. While these companies may be fine, you are under no obligation to use them.

Under Arizona law, you have the right to select any licensed restoration company for your contents. Your insurance company must work with the company you choose. They cannot deny coverage because you selected a non-preferred vendor.

How contents restoration coverage works

Here's the typical flow for the contents portion of a water damage claim:

1. You file your claim — your insurer assigns an adjuster who inspects the damage.
2. You choose a contents company — tell your adjuster who you'd like to handle your belongings.
3. We submit a scope of work — a detailed estimate of the pack-out, cleaning, storage, and pack-back services needed. This uses industry-standard Xactimate pricing.
4. Adjuster approves the scope — they may negotiate line items, but the process is standardized.
5. We do the work — pack-out, clean, store, and return your belongings.
6. Insurance pays us directly — you don't pay us out of pocket. You're only responsible for your deductible on the overall claim.

The contents portion of your claim is separate from the structural portion. Different companies typically handle each part, and each submits their own scope and invoice to your insurance.

What you actually pay

Your deductible — and that's it. Your homeowner's deductible (typically $1,000-$2,500) applies to the entire claim, not separately to structure and contents. After you meet your deductible, your insurance pays for:

• Water extraction and structural drying (mitigation)
• Structural repairs and reconstruction (general contractor)
• Contents pack-out, cleaning, storage, and pack-back (us)
• Temporary housing if you can't stay in your home (ALE coverage)
• Replacement of items that can't be restored

For items that can't be restored, your insurance pays the replacement cost value (RCV) — what it would cost to buy a new, equivalent item today. Some policies pay actual cash value (ACV) first, then release the depreciation when you actually replace the item. Check your policy for details.

Tips for a smooth claim

• Document everything before it's moved. Photos and video of every room, every item, from multiple angles. This is your evidence.
• Don't throw anything away. Let professionals assess what can be saved. Items that look ruined often can be restored.
• Keep receipts for everything. Meals, hotels, gas, laundry — if you're displaced, your ALE coverage reimburses reasonable living expenses.
• Respond to your adjuster promptly. Delays in providing information slow down the entire claim process.
• Get your own estimate. You can hire a public adjuster if you feel your insurance company's estimate is too low. They work on your behalf for a percentage of the settlement.