A home warranty is designed to protect you against unexpected breakdowns of major home systems and appliances due to normal wear and tear. When it comes to water-related issues, the coverage can be more nuanced than many homeowners realize. Below is a closer look at how home warranties typically handle water damage and water leaks, and how homeowners insurance complements that coverage.
Coverage Focus: The Source of the Leak
- Appliances and Systems: If your dishwasher starts leaking or your water heater bursts due to a mechanical failure, a home warranty usually covers the repair or replacement of the failed component.
- Plumbing Leaks: Most home warranty plans include coverage for interior plumbing lines. If a pipe bursts under normal conditions, the warranty generally covers fixing the leak.
Important Note: Once the source of the leak is repaired or replaced, the secondary damage—such as ruined flooring or walls—usually is not covered by the home warranty.
Water Damage vs. Water Leaks
- Water Damage: Refers to harm done to floors, walls, furniture, or other belongings after water escapes. Home warranties typically do not cover these costs, considering them outside normal system or appliance coverage.
- Water Leaks: The warranty generally focuses on stopping the leak by repairing the covered system or appliance responsible. This can include leak detection and accessing the faulty component, such as cutting into a wall or floor only to reach the broken pipe.
Role of Homeowners Insurance
Since home warranties do not address structural or property damage, homeowners insurance often fills that gap.
- Insurance Coverage: If water damage occurs due to a covered peril (e.g., sudden and accidental pipe bursts, some storm-related leaks),homeowners insurance may pay for the costs of repairing walls, floors, or furniture.
- Limits and Exclusions: Insurance policies vary, so review your deductible, coverage limits, and any exclusions for certain types of water damage (e.g., flooding or gradual leaks).
Potential Add-On or Limited Coverage
A few home warranty providers offer add-on or enhanced coverage for water leaks or slab leaks that might include limited funds for accessing the leak behind walls or under floors. However, they still typically exclude the expenses for cosmetic restoration or replacement of damaged materials once the leak is repaired.
Best Practices for Homeowners
- Understand Your Contracts: Carefully review both your home warranty and homeowners insurance policies. Know exactly what each covers—and what they don’t.
- Act Quickly: If you notice a leak, contact your warranty provider as soon as possible to start the claim process. Delaying repairs can worsen damage.
- Keep Detailed Records: Maintain documentation of any water damage, repairs, or insurance claims.
- Perform Preventive Maintenance: Regularly inspect appliances and plumbing lines for signs of wear or small leaks. Preventive care can reduce the likelihood of major water-related incidents.
A home warranty covers repairs for the item causing the leak—such as a broken washing machine or a failed pipe—but doesn’t typically pay for water damage to floors, walls, or personal property. For that, you would turn to homeowners insurance if the damage is due to a covered event. By understanding these distinctions, you can keep both your warranty and insurance policies up to date, ensuring comprehensive protection for your home.
