What to know before you file a home water damage claim

What a home policy usually covers

Most homeowner policies cover sudden and accidental water damage. The Texas Department of Insurance gives examples like a burst pipe, a toilet overflow, or a broken washer hose, and says policies usually will not cover damage from gradual leaks or seepage. Mold follows the same line: mold that develops on a suddenly damaged item is generally covered, while mold from a gradual leak is not.

Flooding is a separate matter. FEMA's answer is direct: flood damage is not typically covered by a homeowners insurance policy. Covering a flood takes a separate flood policy. The Texas Department of Insurance makes the same point and adds that mold from a flood is not covered under a standard home policy either.

First steps after you find water

Insurers expect you to limit the damage. Stop the water at the main valve or at the valves under sinks and near appliances, remove standing water, and start drying the area quickly. The Texas Department of Insurance warns that mold can start growing within a day of a leak. The NAIC calls this work mitigation and says insurance will typically reimburse reasonable temporary repairs, such as covering a hole in the roof, as part of a covered claim. Keep every receipt.

Before you clean up, document everything. The NAIC advises taking photos or video and making a list of damaged and lost items before removing debris or belongings, and saving damaged items so the insurer can inspect them if needed.

• Turn off the water and start drying the area right away.
• Photograph and list all damage before moving anything.
• Make only temporary repairs, and keep the receipts.
• Do not throw damaged items away before the adjuster sees them.

How the claim unfolds

Report the damage as soon as you can. Most companies have a time requirement for reporting a claim, and the Texas Department of Insurance notes that water damage hidden from view usually must be reported within days of when you first see it. When you call, have your policy information and your list of damaged property ready.

After you report, the insurer sends a claims adjuster to inspect, at no cost to you. The NAIC notes that payment may arrive in more than one check, and that if you have a mortgage, the check for structural damage may also be payable to your lender, which can hold it in escrow and release it as repairs are completed.

Watch for contractor fraud

The NAIC warns that home repair fraud is common after disasters. Be wary of aggressive contractors and demands for up-front payment, do not pay cash or write a check before services are rendered, and wait until the work is complete to make the final payment. If a claim is denied or you disagree with the settlement, your state insurance department can explain your options.