Water Damage Clause

Written by:
Image
Paul Tracy

Paul has been a respected figure in the financial markets for more than two decades.

Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 2 million monthly readers. While there, Paul authored and edited thousands of financial research briefs, was published on Nasdaq. com, Yahoo Finance, and dozens of other prominent media outlets, and appeared as a guest expert at prominent radio shows and i...

View all posts
Updated January 16, 2021

What is a Water Damage Clause?

A water damage clause is the section of an insurance contract that details whether and how much the insurer will pay the insured for damage caused by water.

How Does a Water Damage Clause Work?

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.

Why Does a Water Damage Clause Matter?

The water damage clause is among the most important provisions of an insurance policy. Accordingly, it is important to read your policy and understand the protection you do and don't have when it comes to water damage. You may want to consider purchasing extra coverage if a property is vulnerable to certain types of water damage -- especially flooding.

Ask an Expert about Water Damage Clause
At InvestingAnswers, all of our content is verified for accuracy by Paul Tracy and our team of certified financial experts. We pride ourselves on quality, research, and transparency, and we value your feedback. Below you'll find answers to some of the most common reader questions about Water Damage Clause.
Be the first to ask a question

If you have a question about Water Damage Clause, then please ask Paul.

Ask a question

Paul has been a respected figure in the financial markets for more than two decades. Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 2 million monthly readers.

If you have a question about Water Damage Clause, then please ask Paul.

Ask a question Read more from Paul

Read this next

Paul Tracy - profile
Ask an Expert about Water Damage Clause

By submitting this form you agree with our Privacy Policy

Share
close
Don't Know a Financial Term?
Search our library of 4,000+ terms