Are Water Tanks Covered by Insurance?

Water tanks are common features in many homes, providing essential services from hot water to well water supply. Homeowner’s insurance is the primary coverage for damage to or from water tanks in a residential setting. Coverage varies based on the tank type, the cause of damage, and policy specifics. This article explores the typical insurance landscape for water tanks.

Defining Water Tanks for Insurance Purposes

For homeowner’s insurance, “water tank” refers to systems integral to a home’s plumbing and utility infrastructure. This commonly includes hot water heaters providing hot water, and well pressure tanks supplying water to the home. Water softener tanks also fall into this category. These tanks are usually considered part of the dwelling or attached structures.

Distinguishing these integral systems from other water storage solutions is important. Large outdoor rainwater harvesting tanks, for instance, are often treated differently than indoor plumbing systems. Septic tanks, which manage wastewater, and swimming pools may have distinct or no coverage under a standard homeowner’s policy. Non-integral water storage might require specialized insurance or endorsements.

Standard Homeowner’s Policy Coverage

A standard homeowner’s policy covers sudden and accidental water damage originating from the home’s plumbing system. This includes damage from a burst pipe or a hot water heating system failure. If a water heater bursts, the resulting water damage to walls, flooring, or personal belongings would likely be covered under dwelling or personal property coverage.

However, policies contain exclusions that limit coverage for water tank damage. Damage from gradual leaks, seepage, or continuous water discharge is commonly excluded. A slow, unnoticed leak causing long-term deterioration like rot or mold may not be covered. Insurers classify such damage as preventable through maintenance, falling under the “wear and tear” exclusion.

Damage due to lack of maintenance or neglect is not covered. If a water heater fails because it was old and poorly maintained, the cost to replace the unit and any resulting water damage might be denied. Freezing of plumbing systems is excluded if the homeowner failed to maintain heat in the dwelling or shut off the water supply and drain pipes when away. Other exclusions include flood damage, which requires a separate flood insurance policy, and earth movement, which requires a specific endorsement.

Situations Requiring Additional Coverage

While standard policies cover many sudden incidents, certain water-related perils are excluded and may require additional coverage through endorsements. Sewer and drain backup coverage is a common add-on, protecting against damage from water or sewage backing up into the home. Standard policies do not cover this type of water damage. This coverage often ranges from $50 to $250 annually, with limits between $5,000 and $25,000.

Service line coverage is another endorsement protecting underground utility lines running to the home, including water and sewer pipes. This coverage addresses damage to lines that are the homeowner’s responsibility, covering expenses like excavation and repair. Standard policies exclude damage to these external lines. Service line coverage covers issues like wear and tear, rust, corrosion, or tree root intrusion.

For large, non-standard water storage solutions, specialized property insurance or specific endorsements may be required. These systems fall outside the scope of standard homeowner’s policies and need tailored coverage. Homeowners should carefully review their policy documents and discuss their specific water tank setups with their insurance provider to understand existing coverage and explore options for enhanced protection.