Getting Home Insurance with Water Damage Issues
For insurers, the underwriting process is about risk management. This is the framework that determines whether you’re eligible for insurance and how much you’ll pay.
During your insurance application, many aspects of your home will be considered, including its location and construction. Most new policies begin with a company representative inspecting the structure. This includes assessing the level of maintenance, adherence to building codes, and any potential home issues that could lead to a large claim.
If your home is perceived as being lower risk and is in good condition, you’ll typically pay lower rates to insure your home.
How Do Insurers Assess Foundation Problems and Water Issues?
A home could be classified as high risk if the insurer discovers foundation problems or water issues. These two issues can lead to costly claims, and the insurer needs to set your rates accordingly.
Foundation problems are one of the highest risks. A home’s foundation is integral to the stability of the structure and the home’s value. From the insurer’s perspective, a house with foundation damage could be at risk for a wide range of issues including broken pipes, electrical problems, chimneys that are separating from the house, tripping hazards from cracked concrete, and more.
If an inspector finds signs of foundation damage such as uneven footings, wall cracks or bowing, or other signs of foundation damage, your home may be deemed uninsurable until foundation issues are resolved.
The foundation experts at Groundworks can help you learn about any foundation issues up front with a free home inspection. This can help you prepare for insurers, learn about potential solutions, and secure your home. Not only can foundation repair help you mitigate damages in your home, but it can also improve your insurability.
The second biggest risk for insurance companies is water problems. In Flood Insurance 101, we learn the basic principles that water damage is expensive. If the insurer thinks your property has a high risk for filing a claim for flood damage or water issues, your premiums will be higher.
Insurance inspectors will look for previous water problems as a way to predict future issues. They’ll look at the exterior of your home for functioning gutters, downspouts, drainage systems, and yard maintenance. Inside, they’ll check plumbing and HVAC and will look for leaks, water damage, mold, or mildew.
If you’ve already taken steps to mitigate water problems, have those repair documents on hand to show the inspector. Spring cleaning before your inspection can also help your home seem well-maintained and low-risk.
To qualify for flood insurance, some homes may be required to meet the current building codes and flood management regulations. In particular, this includes water management systems that protect the stability of your foundation, such as installing flood vents. Even when they’re not required, installing flood vents can help you significantly reduce flood insurance premiums.
Can Waterproofing and Repairs Help You Lower Insurance Premiums?
Yes! Being proactive about home repairs and maintenance can help your insurance rates.
There are clear financial incentives to encourage homeowners to make repairs that prevent flood damage. You could pay once for a home repair that would protect your property and personal belongings. Alternatively, you could pay higher insurance premiums every month for as long as you live there.
Plus, your up front costs could be lower than you expect. According to the Federal Emergency Management Agency (FEMA), many flood insurance policies will reimburse homeowners up to $1,000 for flood mitigation efforts. Using this free money could result in some homeowners seeing a 15 percent reduction in premiums for the same level of protection.
Consult your agent for specific repairs that affect your insurance policy.
You may see the biggest benefit from a comprehensive waterproofing solution for your basement or crawl space that seals your home against water threats. A sump pump with a battery backup can help you minimize damage if there is a flood. A ground-level drainage system may also help you lower your insurance payments by diverting heavy rain away from your foundation.
If your home has had flood damage, your insurance policies can be a helpful safety net. However, you could come out ahead if you’re able to avoid water problems altogether.
A free inspection from the country’s leading foundation repair experts can help you learn what steps you can take to secure your foundation and protect your home.