Water/sewer backup coverage: buy or not?

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Drain
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Water/sewer backup coverage: buy or not?

Post by Drain » Mon Jun 23, 2014 9:57 am

As I've mentioned in a couple other threads, I'm on the verge of switching my insurance policies (home, auto, umbrella) from USAA to Erie. There are a number of differences in how the companies write their policies, and water/sewer backup coverage is one . Note: While I suspect that my policies are fairly standard for each insurer, the specific characteristics I'm discussing might be different for someone else, especially if they live in another state. (I'm in Maryland.)

USAA includes coverage for water and sewer backup in their homeowner's policies at no additional charge...or at least no additional charge explicitly broken out for me. The coverage limit is the same as the dwelling limit (Coverage A). Erie will provide similar coverage, in $5000 increments, for an additional premium. I am guessing that, realistically, a finished basement like ours would cost no more than around $30K to clean and restore in the near-worst case. (There is always a case that's worse than what you'd imagine to be the worst :), but you can't protect against everything.) I know that the first $5000 of coverage at Erie would run me around $47 with Erie. Not sure beyond that, but I'm wildly guesstimating around $200 for $30K, if I wanted to go that high.

I will boil my inquiry down to two main questions.

1. My home is near the top of a mild hill, and there is apparently nothing on the books (according to the water and sewer utility) about it ever having a backup problem. It's not clear to me how far back the recods go, but there are a couple of non-backup entries from 1989, so the data series is at least 25 years long, and probably much longer. The house was built in 1950. Given all that, is my house less likely than most to experience a water or sewewr backup?
2. Is this an area in which I could reasonably expect to have an advantage over the actuaries? In most cases, I assume I don't, but I don't know if they're taking into account the specific home's location on the hill and the home's past history.

I don't want to over-emphasize the hill--it's not terribly steep. But it's non-negligible. There are many homes at a lower elevation than we are.

Thanks!
Darin

azb
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Re: Water/sewer backup coverage: buy or not?

Post by azb » Mon Jun 23, 2014 10:12 am

We have had some very painful recent experiences that might be relevant. Like you, we live on the top of a hill and thought we were immune from sewer backup issues. We were wrong. We recently had a backup caused by a blockage inside our home (as the plumber said, we didn't have a tree root issue, we had a small child issue). The backup area was not large, but we took a financial hit nonetheless. The cost of removing the 'bio-hazard and replacing the drywall and flooring will cost us about $12,000. I have since signed up for a rider on our insurance policy that will pay for damage up to the policy limits with a deductible of $250--for an extra $100/year. Seems like it will pay for itself if we just have one more backup.

My advice to all homeowners (even those of us who live on the top of a hill) is that they take a good hard look at sewer backup rider. I agree with your assessment that coverage beyond $30,000 is probably excessive, and I would have gotten a higher deductible had it been available.

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Re: Water/sewer backup coverage: buy or not?

Post by FrugalInvestor » Mon Jun 23, 2014 10:15 am

azb wrote:We recently had a backup caused by a blockage inside our home (as the plumber said, we didn't have a tree root issue, we had a small child issue).


Was the child okay? :shock:
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Re: Water/sewer backup coverage: buy or not?

Post by Drain » Mon Jun 23, 2014 10:29 am

Azb, are you saying that your deductible for backup is different than your general deductible? Or are you saying you cannot have any deductible greater than $250 for some reason?
Darin

Easy E
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Re: Water/sewer backup coverage: buy or not?

Post by Easy E » Mon Jun 23, 2014 12:28 pm

FWIW we have Allstate and drain/sewer backup coverage. Our drain a foot outside our finished basement door backed up and flooded our basement causing limited damage mostly to the carpet. Our Agent seemed to think this was a covered claim, but when submitted they denied it because the drain was outside our house. It was re-submitted to that person's manager and still denied. My lesson from that was that insurance companies have many ways to deny claims and that sewer/drain backup coverage will not cover every instance even though our policy specifically says it will cover loss as a result of a sewer or drain backup, end of sentence, and doesn't specify drains located inside or outside the house. That said, I'm too worried to drop the additional coverage and I don't think it costs that much extra each year.

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Re: Water/sewer backup coverage: buy or not?

Post by Drain » Mon Jun 23, 2014 12:43 pm

Easy E wrote:That said, I'm too worried to drop the additional coverage and I don't think it costs that much extra each year.

How much coverage are you getting for the money? Again, in my case, the first $5000 of backup coverage would raise my premium by around $47. While the absolute number of dollars isn't high, it strikes me as high relative to the amount of coverage. If I wanted $30K on the rider, my cost would probably be around $200, which is no longer such a small amount.

Also, what does your endorsement cover? Both structure and personal property, or just personal property?
Darin

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Re: Water/sewer backup coverage: buy or not?

Post by Drain » Mon Jun 23, 2014 12:52 pm

As I think about it, I'm realizing that I'm not even entirely clear on where the water would get in. Like Easy E, we have a drain just outside our basement door. There is a drain in a kitchen, a bathroom sink, a toilet, and a bathtub. (Mother-in-law suite.) Are all those in play? We also have a sump pump (with battery backup) that serves only a window well that overflows during major rain events.

(Aside: My username has never seemed more appropriate.)
Darin

Easy E
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Re: Water/sewer backup coverage: buy or not?

Post by Easy E » Mon Jun 23, 2014 12:59 pm

Drain wrote:
Easy E wrote:That said, I'm too worried to drop the additional coverage and I don't think it costs that much extra each year.

How much coverage are you getting for the money? Again, in my case, the first $5000 of backup coverage would raise my premium by around $47. While the absolute number of dollars isn't high, it strikes me as high relative to the amount of coverage. If I wanted $30K on the rider, my cost would probably be around $200, which is no longer such a small amount.

Also, what does your endorsement cover? Both structure and personal property, or just personal property?


We have a deductible of $250. I believe the max coverage is included within the broader limits of our overall dwelling protection and personal property protection, but I could be wrong. Our policy document just says "Included" under Limits of Liability. Our Agent said our $5,100 claim would be covered after the deductible (if the reviewer didn't deny it), so I know it's more than that. Our total property insurance cost is only $600 for the year so this additional rider can't be that expensive. Unfortunately I don't know the exact amount that it adds.

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Re: Water/sewer backup coverage: buy or not?

Post by azb » Mon Jun 23, 2014 6:34 pm

Drain:

We have a separate low ($250 deductible) for the sewer back-up coverage. I have no idea why there is a separate (quite low) deductible for this coverage when we have a much higher deductible for all other hazards. May be the result of state law (Virginia).

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Re: Water/sewer backup coverage: buy or not?

Post by vtjon » Mon Jun 23, 2014 8:38 pm

Interestingly, I got a quote for an under construction from Erie in Virginia and asked for the water/sewer backup to be included. It shows an annual premium of $147 for $5000 which seems extremely high. There may be a lower deductible though because my main deductible is $1000. I need to follow up with my agent.

I also have to decide if I should include earthquake coverage for $175/year with a 2% ($10K) deductible. I don't have it on my current house in VA though the current house is worth much less.

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Re: Water/sewer backup coverage: buy or not?

Post by IMD801 » Mon Jun 23, 2014 9:04 pm

$0 deductible for about $80/year for $10,000 coverage. It seemed like an obviously good decision considering the sewage lines are blowing left and right around here.

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Re: Water/sewer backup coverage: buy or not?

Post by Drain » Tue Jun 24, 2014 7:48 am

vtjon wrote:Interestingly, I got a quote for an under construction from Erie in Virginia and asked for the water/sewer backup to be included. It shows an annual premium of $147 for $5000 which seems extremely high. There may be a lower deductible though because my main deductible is $1000. I need to follow up with my agent.

Definitely follow up, but if you're comparing your rate to mine, bear in mind that, based on what you imply below, you are insuring more house than I am.

I also have to decide if I should include earthquake coverage for $175/year with a 2% ($10K) deductible.

That is twice what I pay, but again, you would be insuring more house, and you may be closer to a fault--or at least the epicenter of that last signficant quake--than I am. Price shopping is always helpful, but my guess is that the rate you've been quoted would be very competitive, especially considering the low deductible.

You didn't ask for my input, but here it is, anyway. Earthquakes in Virginia are infrequent and not as strong as what you'd get in, say, California. On that basis, earthquake coverage seems like it might be a waste of money. Thing is, builders in Virginia are as aware as you are about the low frequency and strength of earthquakes there, and I'd imagine that they construct homes accordingly. As a result, while the probability is quite low that you will ever file a claim, I'd worry that if a large (by Virginia standards) quake did occur, your house would be just as likely to suffer severe damage as one in California would that had been built to California standards. If Erie's rate is as competitive as I suspect it is, I'd take it. But that's me. Oh, and you can probably drop it to around $100 by raising the deductible to 5%.

I must add that I was pleased by how well the structures in the D.C. area--including my corner of Montgomery County--withstood that recent Virgina quake. I may be reading too much into that, as the shaking wasn't that bad (I'm from the L.A. area, so I have some experience with earthquakes, to the point where I occasionally amuse myself by calling them temblors), but at least it was one data point possibly suggesting that the structures here can withstand a temblor :) better than I'd anticipated.
Darin

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Re: Water/sewer backup coverage: buy or not?

Post by Drain » Tue Jun 24, 2014 7:53 am

IMD801 wrote:$0 deductible for about $80/year for $10,000 coverage. It seemed like an obviously good decision considering the sewage lines are blowing left and right around here.

See, that's less than my rate, and my area does not have any special trouble with sewage lines. Again, I wonder if this is coverage about which a homeowner can often have insight that the actuaries do not. Or my musings and anecdotal evidence could be completely off-base. I don't know.
Darin

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Re: Water/sewer backup coverage: buy or not?

Post by Stonebr » Tue Jun 24, 2014 7:54 am

Call a plumber and get a back-flow valve installed. :happy
"have more than thou showest, | speak less than thou knowest" -- The Fool in King Lear

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Re: Water/sewer backup coverage: buy or not?

Post by Drain » Tue Jun 24, 2014 9:51 am

Stonebr wrote:Call a plumber and get a back-flow valve installed. :happy

I did call our plumber, and the opinion there was that nothing really worked all that reliably.
Darin

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Re: Water/sewer backup coverage: buy or not?

Post by ralph124cf » Tue Jun 24, 2014 10:58 am

This is timely.

On Saturday afternoon I discovered that my sump pump had failed some days ago. It had probably been ten days since I had been down there, so I am not sure how long the flooding had been going on. Luckily, I have another floor drain in the furnace room that leads to a sewage ejector pump, so the water never got more than an inch or so high.

I also have USAA.

My policy charges $174/year for $10,000 of coverage, and I have a $6,000 deductible (1%, which is the lowest deductible that I can get in this area from USAA), so I need $16,000 of damage to get the max benefit. I called USAA about 6 PM on Saturday night, and got the claim started. Monday USAA called back to discuss the damage, They have already cut me a $5,000 check for the cleanup and initial repairs, and will settle in full after repairs are actually complete and damaged furniture and possessions are figured.

This type of service is why I have been with USAA for 44 years, even though they are a few dollars more expensive.

Ralph

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Re: Water/sewer backup coverage: buy or not?

Post by Drain » Tue Jun 24, 2014 11:27 am

I just thought of something. Let's say you have the sewer/drain rider and you experience a major backup, to the extent that you need to move out of your house until the cleanup is complete. You benefit from the sewer coverage, and you also presumably benefit from your "loss of use" coverage, which would pay for your hotel room or temporary apartment.

What if you don't have the rider, though? Doesn't that mean you also don't get the loss-of-use coverage?

This may represent an overlooked benefit of sewer and other similar endorsements. What about earthquake? If you don't have the rider, doesn't that mean you are responsible for the restoration cost and your temporary living arrangements?

If I'm on to something here (I may not be), then it might make sense to at least sign up for the minimum coverage amount just to qualify for loss of use.
Darin

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Re: Water/sewer backup coverage: buy or not?

Post by sesq » Tue Jun 24, 2014 5:25 pm

I just switched from USAA to Erie in march. I was quoted $213 for $10K of Sewer backup coverage. I live in PA and had that rider at USAA for like $50. I elected to self insure with Erie.


I liked USAA quite a bit, but I moved Auto, Home and Umbrella and saved about $700/yr, mostly driven by the fact that USAA used a dwelling coverage amount that was 50% more than my house would sell for. I argued with the gal and she wouldn't reprice, so I got quotes from Erie and Amica and moved on. When I called to cancel the rep who took my instructions couldn't understand why the prior rep insisted on the inflated dwelling value and swore it was my choice to set that value.

I liked that Erie wrote full year auto policies too.

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Re: Water/sewer backup coverage: buy or not?

Post by Drain » Wed Jun 25, 2014 6:11 am

sesq wrote:I liked USAA quite a bit, but I moved Auto, Home and Umbrella and saved about $700/yr, mostly driven by the fact that USAA used a dwelling coverage amount that was 50% more than my house would sell for. I argued with the gal

The market price was irrelevant. You are insuring for the cost to rebuild, which isn't the same as what the house would sell for. They are certainly correlated, but it isn't unusual for the amounts to diverge substantially.

Still, you were right that you had a choice. I would have been uncomfortable about deviating from USAA's estimate, since I wouldn't feel that I knew more about the replacement cost than they did, but with Erie it mostly doesn't matter, due to the guaranteed replacement cost. Negative consequences from Erie underestimating replacement cost will be in percentage-based coverages, which mainly (only?) means debris removal. Your coverage for debris removal will, I believe, be no more than 15 percent of your dwelling limit, and maybe much less, depending on what you chose in your policy. That may or may not cover the entire amount in the case of a total rebuild.

Erie's estimate of the replacement cost for my home was easily the lowest of any of the insurers I spoke with while I was price shopping. This surprised me, as I'd guessed that an insurer that was guaranteeing replacement cost would tend to be conservative and estimate on the high side. But no. And this does result in an overall premium even lower than what was already the lowest premium being offered to me by of those insurers I contacted.
Darin

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Re: Water/sewer backup coverage: buy or not?

Post by Drain » Wed Jun 25, 2014 12:33 pm

Following up after a conversation with my agent...

I am NOT going to be able to outsmart the actuaries. I (and perhaps the agent, as well, although I don't specifically recall her making any such statement) grossly overestimated the impact of raising my sewer/drain coverage from $5K to $10K. The first $5K of coverage is $47. The next $5K is $6. My conclusion is that, yes, Erie is perfectly aware that the giant, truly horrible sewer backups don't typically occur here.

Also, I confirmed that having the sewer/drain coverage made me eligible for loss of use, while not having the coverage made me ineligible. This seems obvious, but I hadn't thought of it before this thread. So what looks like $5K of coverage is actually worth more than that, since your additional living expenses would also be paid if you had to move out while your home was being cleaned up.

Vtjon, if you're still reading this, I'd be interested to learn what other sewer/drain quotes you get, if you bother.
Darin

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Re: Water/sewer backup coverage: buy or not?

Post by vtjon » Wed Jun 25, 2014 1:35 pm

Drain wrote:Vtjon, if you're still reading this, I'd be interested to learn what other sewer/drain quotes you get, if you bother.


I'm still following along. I won't talk to my agent for another couple of weeks while I wait for my house to be completed. When we are close to completion, I will go through everything with him. I will update this thread based on what I find.

My quote might be higher since it's on a well/septic but maybe not. I'll find out though.

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Re: Water/sewer backup coverage: buy or not?

Post by OAG » Thu Jun 26, 2014 12:23 pm

Stonebr wrote:Call a plumber and get a back-flow valve installed. :happy



+1 Personal experience in Florida (no basement). About $50K total damages all covered by insurance. Backflow devices are good UNLESS the back up is internal in the house (upside of the BFD). They will stop downside intrusion UNLESS installed backwards :oops: .
OAG=Old Army Guy. Retired CW4 USA (US Army) in 1979.

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Re: Water/sewer backup coverage: buy or not?

Post by sesq » Thu Jun 26, 2014 3:30 pm

Drain wrote:
sesq wrote:I liked USAA quite a bit, but I moved Auto, Home and Umbrella and saved about $700/yr, mostly driven by the fact that USAA used a dwelling coverage amount that was 50% more than my house would sell for. I argued with the gal

The market price was irrelevant. You are insuring for the cost to rebuild, which isn't the same as what the house would sell for. They are certainly correlated, but it isn't unusual for the amounts to diverge substantially.


In my case they came up with a value of about $600k, demolition is separately covered. My house and land is worth about $400k, roughly 1/4th of that is land. They are building houses identical to mine in my development and selling them for $400k. While a one off job would have higher costs than the ongoing tract construction the USAA model was off.

But yes, the replacement coverage at Erie was more than sufficient.

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Re: Water/sewer backup coverage: buy or not?

Post by Drain » Thu Jun 26, 2014 4:06 pm

OAG wrote:
Stonebr wrote:Call a plumber and get a back-flow valve installed. :happy



+1 Personal experience in Florida (no basement). About $50K total damages all covered by insurance. Backflow devices are good UNLESS the back up is internal in the house (upside of the BFD). They will stop downside intrusion UNLESS installed backwards :oops: .

From what I've read, the downside of these back flow preventers is that they can cause their own clogs. A check valve is a thing in the pipe, and as such, it takes up some of the space that would otherwise be clear for flow. It may not be much space, but having the device there must make it at least marginally more difficult for debris to squeeze by.

Otherwise, I agree that it's an appealing solution. And the negative stuff I've found on the web does not amount to a balanced study.
Darin

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Re: Water/sewer backup coverage: buy or not?

Post by Drain » Thu Jun 26, 2014 4:12 pm

sesq wrote:But yes, the replacement coverage at Erie was more than sufficient.

That's the beauty of guaranteed replacement cost. On paper, it is always sufficient, debris removal and other extra items aside.
Darin

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Re: Water/sewer backup coverage: buy or not?

Post by runner9 » Thu Jun 26, 2014 5:46 pm

Had 2 feet of sewer backup last July. Erie paid out $10K max after a 10 minute visit and no documentation for me, only photos from their adjuster.

We didn't spend the whole $10K as I did everything myself (new drywall, bathroom tile, toilet, vanity, 9 gallons of paint, etc.) so we had a backup valve put in the front yard for $2100 in November. Hopefully it will work, hopefully I'll never find out.

Erie was here in 4 days with and adjuster from a 7 hour drive away, check was in the mailbox the next day. That was about the fastest on our 18 house street.

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Re: Water/sewer backup coverage: buy or not?

Post by miles monroe » Thu Jun 26, 2014 7:58 pm

for what its worth, clark howard recommended to a caller recently that they get this coverage.

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Re: Water/sewer backup coverage: buy or not?

Post by terpfan122 » Thu Jun 26, 2014 8:04 pm

I have Erie homeowner's policy and I have the water sewer back-up. I am really glad that I have it because back in 2010 my basement flooded b/c of a sewer back-up. Erie took care of everything and even waived my detectable (500$) b/c I spent hours draining the basement myself. Between the contactor and the restoration company I think the total damage was around 14k. I also have a finished basement and I live in MD.

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Re: Water/sewer backup coverage: buy or not?

Post by DonDraper » Thu Jun 26, 2014 9:05 pm

FWIW I had a sewer backup a few years ago and had a shut off valve installed along the sewer line in the front of the house. I literally have to put an 8 foot pole down into the ground which turns a valve that will completely seal off the sewer pipe. I now have a water alarm in the lowest drain so if starts going off I can run outside and 100% seal off the sewer pipe. They put in a regular back flow preventer as well but like the guy said that will only slow the flow but not stop it 100%.

That cost me a few grand but I did it just for piece of mind because the first backup freaked me out knowing how powerless I was to stop it. It already saved my butt last January.

Oh and of course I now pay for the insurance rider as well.

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Re: Water/sewer backup coverage: buy or not?

Post by vtjon » Wed Jul 09, 2014 3:39 pm

I found more information on this. My $147 premium included several other things than just sewer/drain backup. The sewer/drain backup is $5k but also includes these other things with varying caps:
Sewer or Drain Backup
Business Personal Property
Loss Assessment
Personal Computer
Ordinance or Law
Siding and Roofing Restoration
Animals
Debris Removal
Limits for Money
Lock Replacement
Personal Property at Other Residence
Theft, Misplacement or Losing of
Jewelry, Furs, Guns
Theft of Media from Motor Vehicles
Trailers
Trees, Shrubs, Plants, Lawns
Watercraft
Watercraft Liability
Evidence of Debt
Automatic Garage Door Malfunction
Identity Recovery and Fraud
Reimbursement
Other Structures - Off Premises

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Re: Water/sewer backup coverage: buy or not?

Post by August » Wed Jul 09, 2014 7:02 pm

If you have a sump pump or drain in the floor of the basement then get the coverage. If you have no drain in the basement and no sump pump, the coverage is pointless. Typically exterior drains are not covered under this rider as they are usually not connected to the plumbing system and once the water hits the ground it is considered surface or ground water as opposed to a sewer back up. The interpretation of the endorsement and coverage may vary based on your carrier and the state the property is located in.

To answer the loss of use question, under most HO policies there does need to be a covered cause of loss for loss of use coverage to kick in. So no back up endorsement means no loss of use coverage. That being said, in several years of property claims adjusting, I have never seen a water back up claim that caused the house to be unlivable (flooding or a pipe burst yes but not a sump overflow or sewer back up) as typically the loss is limited to the basement. Usually for insurance purposes, the kitchen and/or all bathrooms need to be non functioning for the house to be unlivable.

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Re: Water/sewer backup coverage: buy or not?

Post by Drain » Thu Jul 10, 2014 1:15 pm

August wrote:If you have a sump pump or drain in the floor of the basement then get the coverage. If you have no drain in the basement and no sump pump, the coverage is pointless.

What if the basement has sinks, a toilet, and a bathtub, but no floor drain or sump pump? (We have a sump pump, but only to service one window well that tends to overflow. And we have a secondary battery-powered pump there, too.) Same thing, right? Water or sewage could still flow into the house. In our area, since the storm water drainage is not combined with the sewer lines, I guess sewer backup can only be through the toilet, and is highlyunlikely to be severe (only our own sewage).

Please correct any misunderstandings I might have.

To answer the loss of use question, under most HO policies there does need to be a covered cause of loss for loss of use coverage to kick in. So no back up endorsement means no loss of use coverage. That being said, in several years of property claims adjusting, I have never seen a water back up claim that caused the house to be unlivable (flooding or a pipe burst yes but not a sump overflow or sewer back up) as typically the loss is limited to the basement. Usually for insurance purposes, the kitchen and/or all bathrooms need to be non functioning for the house to be unlivable.

I would think that if a finished basement had two feet of sewage in it, the house would be unlivable.
Darin

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Re: Water/sewer backup coverage: buy or not?

Post by Drain » Thu Jul 10, 2014 1:19 pm

vtjon wrote:I found more information on this. My $147 premium included several other things than just sewer/drain backup. The sewer/drain backup is $5k but also includes these other things with varying caps:
Sewer or Drain Backup
Business Personal Property
Loss Assessment
Personal Computer
Ordinance or Law
Siding and Roofing Restoration
Animals
Debris Removal
Limits for Money
Lock Replacement
Personal Property at Other Residence
Theft, Misplacement or Losing of
Jewelry, Furs, Guns
Theft of Media from Motor Vehicles
Trailers
Trees, Shrubs, Plants, Lawns
Watercraft
Watercraft Liability
Evidence of Debt
Automatic Garage Door Malfunction
Identity Recovery and Fraud
Reimbursement
Other Structures - Off Premises

That sounds suspiciously like an Erie bundle. :) Glad to hear that the premium makes sense.

I don't know how I feel about the bundling paradigm. On one hand, so much of the coverage is useless to me that I feel like I'm paying for too much that I don't need. On the other hand, the policy--mine, at least--is still inexpensive, so I'm guessing Erie prices its bundles on the assumption that most people have no use for most of it, and therefore will not be making claims on most of it.
Darin

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Re: Water/sewer backup coverage: buy or not?

Post by August » Thu Jul 10, 2014 7:14 pm

Drain wrote:
August wrote:If you have a sump pump or drain in the floor of the basement then get the coverage. If you have no drain in the basement and no sump pump, the coverage is pointless.

What if the basement has sinks, a toilet, and a bathtub, but no floor drain or sump pump? (We have a sump pump, but only to service one window well that tends to overflow. And we have a secondary battery-powered pump there, too.) Same thing, right? Water or sewage could still flow into the house. In our area, since the storm water drainage is not combined with the sewer lines, I guess sewer backup can only be through the toilet, and is highlyunlikely to be severe (only our own sewage).

Please correct any misunderstandings I might have.

To answer the loss of use question, under most HO policies there does need to be a covered cause of loss for loss of use coverage to kick in. So no back up endorsement means no loss of use coverage. That being said, in several years of property claims adjusting, I have never seen a water back up claim that caused the house to be unlivable (flooding or a pipe burst yes but not a sump overflow or sewer back up) as typically the loss is limited to the basement. Usually for insurance purposes, the kitchen and/or all bathrooms need to be non functioning for the house to be unlivable.

I would think that if a finished basement had two feet of sewage in it, the house would be unlivable.


All I can do is speak from my experience. Many (not by any means all), basement floods are due to either ground water (lots of rain), storm water backing up through the sewer or drains, or the power goes out and/or the sump pump can't keep up and it overflows. The ground water loss would most likely be excluded under an HO policy, the other two may have some coverage provided under the water back up/over flow endorsement. If there is a clog on the premises or the source of the water is within the home that is usually not considered a water back up and is covered under most HO policies (for example a running toilet or a clogged toilet that overflows). A sump pump located outside the house which overflows (i.e. in a window well) or an exterior drain (like outside a door at the bottom of the stairs) may or may not be covered under the sump endorsement. This will depend on the wording of the endorsement, the location of the sump pump/drain, the state where you live, and your carrier's interpretation of the wording of the endorsement (i.e. what their lawyers say).

I would ask your HO carrier prior to incurring any loss of use expenses for damage limited to a basement. Typically, the water can be removed in several hours and if the remainder of the house is not affected it is usually not cause for a hotel. The water heater which is often affected can also usually be fixed within 24 hours. Additional expenses due to the extra electricity used by the drying equipment may be covered. Every carrier has different guidelines and a lot depends on your specific situation.

Disclaimer: I have not reviewed the policy in question so any advice should be taken as general advice and may not apply to every or even most situations. My experience is primarily with flooded basements that occur due to excessive rain combined with power outages. This is by far the most common denial I see as an adjuster.

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