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Does Insurance Cover Damage From Water Main Breaks?September 8th, 2012 Noyes Hall & Allen
After the recent rash of water main breaks in South Portland Maine, many locals wonder if their Maine business insurance policy or Maine homeowners insurance covers water damage from such an occurrence. Here are some answers, depending on what kind of Maine insurance policy you purchased.
Is the Water District Responsible for Broken Water Mains?
In general, Maine public utilities are not considered liable except in cases of negligence. If they were repairing a main and forgot to shut off the water before disconnecting, causing a flood, you might have recourse. If the break is caused by an unforeseen circumstance, wear & tear, etc., you are probably on your own to repair the damage.
Basic Insurance Policies
Off-the-shelf Maine business property insurance policies do not cover water backup or flood damage. Neither do basic homeowners, renters or condominium policies. While most do cover damage from leaking, freezing, or breaking of plumbing fixtures and appliances on the premises, damage from water that comes from the ground or under the ground is excluded. The two most common coverages that you can purchase are Water Backup Coverage and Flood Insurance.
Water Backup Coverage
Maine businesses and residents can purchase an endorsement to their property insurance policy that covers backup of sewers and drains. Water backup insurance is relatively inexpensive, because it only covers damage from water that backs up into your building. Damage from surface water or seepage through a foundation are not covered. If the water main break caused your drain to overflow, backing water into your building, you may have coverage. Unfortunately, that’s not usually what happens with a water main break. Usually, the water bubbles to the surface and inundates an area. To get coverage for that, you need to buy flood insurance.
Only a small percentage of residents and businesses in Greater Portland purchase Maine Flood Insurance. They think that because they’re not in an area that susceptible to flooding, they’ll take their chances. Maybe they never even thought about buying flood insurance. But, many events can cause a flood, from hurricanes to snowmelt – including a water main break.
To be defined as a flood, surface water must cover area that is normally dry land. If that area is more than 2 acres, or at least 2 contiguous property parcels are affected (including yours), you have experienced a flood. The only way to buy flood insurance is to buy a special flood policy. (Well, flood coverage can be included in a “DIC” policy, but that’s generally for large corporations and commercial projects.)
Both businesses and individuals can purchase Maine flood insurance. It’s a federal program administered by FEMA. The rates and coverage are the same no matter who you buy it from. Rates vary considerably depending upon what flood zone your property is in. Flood insurance policies for residential properties differ from commercial properties. Residential policies start at about $300 per year; business policy premiums vary greatly by the amount of coverage.
If your home or business is in southern Maine, we would be happy to answer your questions about insuring your property. We have provided Maine business property insurance and personal insurance services to the Portland Maine area for more than 75 years. Contact a Noyes Hall & Allen Insurance agent at 207-799-5541.