How Does a Water Damage Clause Work?

3/1/2021 (Permalink)

For example, let's assume that John has a homeowner's insurance policy for the house he lives in. One winter night, a pipe freezes and bursts, spewing water all over the garage and ruining the drywall. John's insurance policy has a water damage clause that covers damage due to burst pipes, so John files a claim and has his insurance company reimburse him for the cost of repairing the garage.

The following spring, a big storm produces six inches of rain in two hours. The ground is saturated and the streets flood. Water seeps into John's basement, ruining all the furniture, carpeting and walls. John's insurance policy has a water damage clause that says it will NOT cover damage due to flooding, so in this instance, the insurance company does not reimburse John for the cost of repairing the damage.

https://investinganswers.com/dictionary/w/water-damage-clause

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