Does Homeowners Insurance Cover Water Damage (and Mold)? Read This First

Avoid claim mistakes, understand what’s covered (and what isn’t), and learn the smart steps to take on day one.

Quick Summary

• Usually covered: Sudden and accidental water events (e.g., burst supply line, toilet overflow without sewer backup, broken washer hose). Resulting mold is typically covered when it stems from that covered event and within policy limits.
• Usually not covered: Flooding from outside, sewer backup without a specific endorsement, and long-term or neglected leaks (maintenance).
• Add-ons to consider: Water/sewer backup, hidden/“concealed” water, and mold endorsements or sublimit increases.
• Action items: Stop the source, document everything, mitigate promptly, open a claim, and keep receipts. Ask your insurer about Additional Living Expense (ALE) if rooms are unusable.

What “Water Damage” Means in Home Insurance

Homeowners policies cover your home (dwelling), your stuff (personal property), your use of the home (ALE), and your liability. Water damage fits into that framework based on cause and timing:

• Covered peril: A sudden, accidental event that damages covered property.
• Excluded/limited: Ongoing seepage, faulty maintenance, or outside floodwater unless you bought separate coverage.

Policies also include sub-limits and exclusions that can affect mold, water backup, and code upgrades. Always check your declarations page and endorsements.

When Water Damage Is Typically Covered

Examples that are commonly covered (subject to your deductible and limits):

• Burst pipe in a wall that soaks drywall and floors.
• Toilet overflow (without sewer backup) that wets a bathroom and hallway.
• Broken washer hose with sudden discharge.
• Accidental discharge/overflow of household systems (e.g., tub left running).
• Wind-driven rain that enters through a storm-damaged opening.

Mold tie-in: When mold results directly from a covered water event and you acted promptly to mitigate, most policies provide some coverage—often capped by a mold sub-limit.

When It’s Not Covered (and Why)

• Flooding from outside (rising water, storm surge, river/groundwater): needs separate flood insurance (NFIP or private).
• Sewer or sump backup: typically excluded without a water/backup endorsement.
• Long-term leaks, seepage, or humidity from lack of maintenance (e.g., a slow roof leak over months).
• Mold from neglect or delayed mitigation: often excluded or limited.

Tip: If you’re unsure whether the cause is “sudden and accidental,” open a claim for guidance before tearing out materials—preserve evidence.

Mold Coverage: What Most Policies Actually Do

• Resulting mold from a covered water loss is often included but with a specific sub-limit (commonly a few thousand dollars).
• Policies may cover removal, remediation, testing, and rebuild tied to that covered event—only up to the mold limit unless you’ve purchased an increased limit.
• Not covered: Mold from excluded causes (flood, long-term leaks) or failure to mitigate.

Practical takeaway: Ask your agent about your current mold sub-limit and whether you can buy a higher option.

Add-Ons/Endorsements That Can Save a Claim

• Water Backup / Sump Overflow: Helps when drains, sewers, or sump pumps back up into the house.
• Hidden/Concealed Water: Adds coverage for damage from leaks hidden within walls, floors, or ceilings when unknown and not reasonably discoverable.
• Flood Insurance: Separate policy for rising water; often required in high-risk zones but valuable even outside them.
• Ordinance or Law (Code Upgrades): Pays the extra cost to meet current building codes during covered repairs.
• Increased Mold Limit: Raises that small mold cap for bigger cleanups.

Should You File a Claim or Pay Out of Pocket?

Ask yourself:

1. Cause: Is it clearly a covered peril? If not, a claim may be denied.
2. Cost vs. Deductible: If repairs are near or below your deductible, paying out of pocket may make sense.
3. Future premiums: Claims can affect rates or insurability; consider the long view.
4. Severity & health risk: Sewage/flood or extensive mold → prioritize safety and expert mitigation, then talk to your carrier.

Step-by-Step: How to File a Water/Mold Claim

1. Stop the source (shut off main, tarp roof if safe).
2. Protect people and property (cut power safely, use PPE).
3. Document everything: Photos/video before cleanup; note water lines, affected rooms, serial numbers on damaged items.
4. Mitigate promptly: Extraction, dehumidification, and containment—keep receipts.
5. Notify your insurer and get a claim number; ask about ALE, preferred vendors, and required documentation.
6. Save evidence: Don’t discard materials until the adjuster authorizes it (unless a health hazard).
7. Track costs & progress: Keep a daily log, invoices, and moisture readings if available.
8. Confirm scope & limits: Ask specifically about mold sub-limits and any applicable endorsements.
9. Get written estimates for rebuild; verify permits and code upgrades coverage.
10. Final walkthrough: Ensure moisture is back to normal before closing walls or reinstalling floors.

Avoid These Common Claim Mistakes

• Waiting days to call or mitigate; mold can start fast.
• Throwing out damaged items before photographing and inventorying.
• Starting rebuild before moisture verification.
• Assuming flood/backup is covered without the right endorsement.
• Not asking about ALE for lodging/meals when rooms are unusable.
• Accepting the first settlement without reviewing scope, sub-limits, depreciation, and recoverable depreciation rules.

FAQs

Is mold ever covered by homeowners insurance?
Yes—when it’s the result of a covered water loss and you mitigated promptly. Expect a mold sub-limit unless you purchased higher coverage.

Does insurance pay to fix the leak itself?
Often no (the broken part is a maintenance item), but policies generally cover the resulting damage from the sudden release.

What’s the difference between water damage and flood damage?
“Water damage” usually refers to internal, sudden events; “flood” is rising water from outside and needs a separate flood policy.

If my sewer backs up, am I covered?
Only if you have a water/backup endorsement—check your declarations page.

Can I choose my own contractor?
Usually yes; carriers may suggest preferred vendors, but you can hire any properly licensed and insured contractor.