Property Damage & Restoration Claims
Why water damage claims are decided by cause and category, and how to keep control of your own claim.
Cause decides coverage
Standard homeowners policies cover sudden and accidental discharge — a burst pipe, a failed appliance hose. They generally exclude surface flooding, which requires separate flood coverage, and gradual seepage, which is treated as a maintenance failure. Almost every denied water claim turns on which of those three categories the loss falls into.
Category drives the price
Restoration prices by water category. Category 1 is clean water and can often be dried in place. Category 2 is grey water from appliances. Category 3 is contaminated, and requires removal and disposal of porous materials, containment and antimicrobial treatment rather than drying. Moving from category 1 to category 3 can more than double the cost of the same square footage.
The first hour matters most
Stop the source, then photograph everything before any water is removed. Independent moisture readings taken early are the strongest evidence of extent. Notify the insurer immediately: delayed notice is one of the most common grounds for reducing a claim, entirely separate from whether the loss was covered.
Actual cash value versus replacement cost
On a replacement-cost policy the insurer typically pays actual cash value first and releases the remaining recoverable depreciation only after the work is completed and invoiced. On an actual cash value policy the depreciation is never released. On an older roof that difference can run into five figures.
Assignment of benefits
Restoration contractors frequently ask you to sign an assignment of benefits, transferring your right to the insurance proceeds to them. It removes your control of the claim, and disputes between contractor and insurer become your problem. Read what rights it hands over before signing anything on a wet floor.
Documenting a fair settlement
Get an independent estimate rather than relying solely on the adjuster's figure. Keep every receipt, including hotel and meals if the property is uninhabitable — additional living expenses are a separate coverage most people forget to claim.
Common questions
Does homeowners insurance cover flooding?
Generally not. Surface flooding usually requires a separate flood policy, while a burst pipe is normally covered.
What is recoverable depreciation?
The withheld portion of a replacement-cost claim, released once you prove the repair was actually completed.