How Does Water Backup and Sump Pump Discharge or Overflow Coverage Work?

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Water backup insurance (Photo: @emerald_media via Twenty20)
When you own a home, protecting it is extremely important. You can do so simply and easily by getting either a home warranty or homeowners insurance.
But while your policy protects your home from a variety of things, it doesn’t provide total coverage. That’s why insurance companies offer different coverage options to pay for damage to your home from sources not covered in your homeowner’s insurance policy.
One such type of coverage is water backup and sump discharge or overflow coverage. Here’s what you should know about this form of coverage and how it can protect your home.

The Differences Between a Backup, Discharge, and Overflow

Water damage to your home can be confusing when it comes to what is and isn’t covered by your homeowner’s insurance policy. In some instances, your regular insurance will cover any water damage, while in others it won’t, requiring separate coverage. The difference between the various kinds of water damage comes down to the source of where the water comes from.
Backup: A backup is when water accumulates in an area in your home due to a stoppage in the flow. The blockage causes the water to backup and flow back the other way. A common causes of water backup is a collapsed drainage pipe.
Overflow: An overflow occurs when water in your home exceeds the boundaries of whatever is holding it. The water then flows into other areas of your home, causing damage if you don’t deal with it immediately. An example of water overflow is a sink or bathtub that has left running and gets too high, flowing out onto the floor around it.
Discharge: A discharge happens when water flows out of something, usually in a spot it is not supposed to. A perfect example of a discharge is a burst pipe. In such cases, the water to the home or pipe has to be turned off before a discharge can be fixed.

What Kind of Water Damage Does a Homeowner’s Insurance Policy Cover?

In most cases, water damage that occurs accidentally or suddenly from a source inside your home is covered by your homeowner’s insurance policy. But, if the water comes from an outside source, chances are the damage caused is not covered.
If the water damage to your home was caused by a maintenance problem, such as a leaky pipe under the sink that you knew about for months, then your homeowner’s insurance policy will not cover it. Also, water or sewage pipe backups are not covered by your homeowner’s insurance.
Fortunately, there is coverage for this type of damage. The only catch is it will cost you more. Insurance companies offer specialized coverage in the form of endorsements which add to, subtract from, or somehow update your policy to account for coverage in problem areas, such as water damage.

Do You Need a Water Backup and Sump Discharge or Overflow Endorsement?

Chances are you will thank yourself if you get a water backup and sump discharge or overflow endorsement, especially if you have a sump pump in your basement. Sump pumps are notorious for failing at the most inopportune of times. Having additional coverage to help pay for the damage caused by the resulting water backup when this happens can pay for itself over time.
It is also a good idea to protect yourself from accidental flooding from an outside source, which this type of coverage also pays for. If your area is prone to flooding, then opting for water backup and sump discharge or overflow coverage protects your home if a storm drain or pipe outside of your home overflows and causes water damage.