Does Homeowners Insurance Cover Underground Water Leaks?

Last Updated on October 10, 2022 by Andrew Lee

Homeowners policies cover water leaks that occur suddenly, whether in the home’s underground or above-ground piping; however, slow leaks are excluded as maintenance issues. 

In addition, the damage must come from the pipes that belong to your property. If the water leak originates from another source, such as a municipal water main, your homeowners insurance company will likely deny responsibility for the damage to your home.

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What Types of Water Leaks Does Homeowners Insurance Cover?

A standard homeowners policy covers sudden leaks from piping and appliances. Common water leaks that homeowners insurance covers include pipe bursts, dishwasher or washing machine leaks, fire protection sprinkler leaks, and HVAC-related water damage.

Homeowners need to be aware that hidden water damage occurring over weeks or months is likely excluded from coverage. To mitigate damage from hidden, slow water seepage, homeowners should routinely check areas where water from slow leaks accumulates, such as crawl spaces, ceilings, cabinets, under floors, and behind appliances.

Hidden Water Leak Coverage Options

Your homeowners policy may seem unfair to provide no coverage for hidden water leaks. After all, they can cause significant damage, and you pay your insurance premiums to protect yourself against the expenses of repairing leaks, removing excess water, and repairing the damage, including structural replacements and mold remediation.

Some homeowners insurance companies offer a solution to this risk through hidden water coverage. This policy add-on provides coverage should a hidden water leak wreak havoc behind your walls or appliances. Hidden water coverage pays for the wear and tear, deterioration, and corrosion caused by slow water leaks from plumbing, HVAC systems, and household appliances. 

However, hidden water damage pays for mitigation of the water damage only, not for the plumbing or appliance responsible for the leak. Therefore, you will still have to pay out of pocket to repair or replace the water damage source.

What Is the Difference Between a Water Main Leak and a Pipe Leak?

Both broken water mains and pipe bursts can cause sudden and major damage to homes through underground water leaks. The water pressure from these plumbing fixtures is extremely high, so damage is usually sudden and almost immediately noticeable. 

From an insurance standpoint, this is good because homeowners policies cover abrupt leaks but not slow ones. However, before your insurance companies accept your claim, their adjusters must determine if the damage resulted from your home’s plumbing or a water main.

What Are Water Mains?

Unless you live in a rural area and rely on your own well for water, your home’s water supply usually comes from the city or the village. The municipality delivers water to its homes through water mains, which are large pipes that run beneath the town. They form a system that carries water to spurs and pipelines that connect to each building’s internal plumbing systems.

Each property has a termination point between its water and main lines. A meter installed at this point measures each property’s water use so that the city can bill each building owner accordingly. 

Though water mains are located under streets and yards, their failure can still result in underground water backing up into your home. Damage of this type often causes major problems, including destroyed structures and mold that can render a home inhabitable.

Since the city bears responsibility for water main breakage claims, you must contact your local town or municipality and inform them of the damage. In addition, you will need to provide a repair estimate. In certain situations, proving the damage resulted from a water main leak may require an investigation. If you are unsure if the underground leak came from your home’s plumbing or a water main, you may want to report the problem to your homeowners insurance and the municipality, covering both bases.

Water leaks can result in significant damage to your home; thankfully, underground leaks from your property’s plumbing fall under your homeowners insurance policy, and water main leaks are the city’s responsibility, allowing you to receive compensation for damage to your home.

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