Does Insurance Cover Water Damage Restoration?

Homeowners insurance usually pays for water damage restoration when the water came from something sudden and accidental, like a burst pipe or a broken washer hose. It usually does not pay when the damage came from a slow leak over time, from a flood, or from a sewer backup you didn't add coverage for.

When the loss is covered, the cost of emergency water removal and drying is generally part of your claim, minus your deductible. Here's how it works and who ends up paying the restoration company.

Safety before cleanup

Ready.gov ↗ warns not to touch electrical equipment if it is wet or if you are standing in water, and to turn off the power only if it's safe. Floodwater can be contaminated. If you smell gas or the structure looks unsafe, get out and call 911 or your utility.

What water damage homeowners insurance usually covers

The Texas Department of Insurance (TDI) ↗ says most homeowner and renters policies cover sudden and accidental water damage, such as a burst pipe, a toilet overflow, or a broken washer hose. The Insurance Information Institute (Triple-I) ↗ says the common HO-3 policy covers accidental discharge of water from a plumbing system.

When the cause is covered, the restoration work tied to it is usually part of the claim: removing water, drying the structure, and repairing damaged drywall, floors and cabinets. Your policy's exact wording and limits control what's paid.

What it usually doesn't cover

Gradual leaks and seepage

TDI says most home policies don't cover water damage from gradual leaks or seepage, including mold that comes from it (TDI ↗). Triple-I says groundwater seeping into a basement is excluded and treated as a maintenance issue (Triple-I ↗).

Flood

Most homeowners and renters insurance does not cover flood damage (FloodSmart ↗). You need a separate policy from the National Flood Insurance Program (NFIP) or a private insurer. Key NFIP points from FloodSmart:

• Coverage usually starts 30 days after you buy, with a few exceptions.
• Homeowner policies cover up to $250,000 for the building and $100,000 for contents.
• Personal property kept in basements is not covered.

For cleanup after a flood, FEMA's NFIP checklist tells policyholders to ask their insurer which cleaning expenses and repair services the flood policy covers (NFIP checklist ↗). Do that before the restoration crew starts if you can.

Sewer and drain backup

Florida's Department of Financial Services (DFS) says homeowners policies don't typically cover water that backs up from a sewer, sump or drain, and that you can buy a water backup endorsement for it. That endorsement does not cover flood (Florida DFS ↗). TDI says some policies do cover sewage entering through sewers or drains, so it depends on your policy (TDI FAQ ↗).

If a flood caused the backup, the cause matters. FloodSmart says a flood policy would cover a sewer backup during a heavy rainstorm, but not a backup from clogged pipes (FloodSmart ↗). For cleanup steps, see our sewage backup cleanup guide.

Your duty to prevent more damage, and who pays for it

After a loss, you're expected to keep the damage from getting worse. Triple-I tells homeowners to photograph the damage, then "take reasonable steps to protect your property from further damage," and to save receipts so you can submit them for reimbursement (Triple-I ↗).

Insurance regulators say these emergency costs are generally part of the claim:

• TDI: "Your policy should pay for the materials and labor you used to make repairs," as long as they're temporary and you photograph the damage first (TDI FAQ ↗).
• TDI also says your policy may pay for temporary repairs and to save all receipts (TDI ↗), and that if you can't remove the water and dry the area yourself, you should use a service (TDI ↗).

Two cautions:

• Don't make permanent repairs until your insurer has seen the damage (TDI ↗).
• Emergency costs come out of the same claim. Triple-I notes payments for temporary repairs are part of the total settlement, so overspending on them can leave less for permanent repairs (Triple-I ↗).

Act fast. TDI says mold can start growing within a day after a leak. To understand how long drying usually takes, see how long water damage takes to dry.

How your deductible works

Your deductible is the part of the loss you pay before insurance kicks in (Triple-I ↗). Triple-I suggests asking your insurer whether your claim will exceed your deductible before filing (Triple-I ↗). Your insurer may ask for proof that you paid it (TDI ↗), so plan to pay that share to the restoration company yourself.

Be wary of any company that offers to "eat" your deductible. TDI says it's illegal in Texas for a contractor to offer to waive it (TDI ↗).

Who pays the restoration company?

Your contract is with the company

The DC insurance department explains that the insurer's job is to pay for the repairs, not to make them, and that the contract is always between you and the contractor. Even when an adjuster calls in a crew for emergency work, the contractor will have you sign the work authorization and agree to pay (DC DISB ↗). That means if the insurer pays less than the bill, you may owe the difference. Get a written estimate and ask your insurer what it will cover.

Checks may include your mortgage company

TDI says that if you have a loan on your house, the insurer will usually send the check to your mortgage company, and you'll work with the lender to get the money released (TDI FAQ ↗). In Texas, the lender must contact you within 10 days of getting the check. TDI also warns that some insurers treat a claim as settled once you sign the check, so ask first.

Direct pay and assignment of benefits

Some restoration companies ask to be paid directly by the insurer. Read exactly what you're signing. In Florida, you cannot assign post-loss benefits under a residential property policy issued on or after January 1, 2023; such assignments are void (Fla. Stat. 627.7152 ↗). In other states, ask your insurer or state insurance department before signing over any claim rights. Our restoration contractor scams guide covers paperwork traps.

Insurer's preferred vendor or your own choice?

Your insurer may suggest a restoration company. Whether you must use it depends on your state and policy:

• Texas: TDI has said homeowners and dwelling policyholders are entitled to have their home repaired by the person of their choice (TDI Bulletin B-0017-17 ↗).
• Washington, D.C.: You may use the insurer's suggestion but aren't required to (DC DISB ↗). DC notes a known contractor may get extra costs approved faster.
• Florida: Some insurers sell a preferred contractor endorsement that gives a premium or deductible discount in exchange for using their approved vendors, with conditions (Florida DFS ↗).

See our checklist on how to choose a restoration company.

Keep every receipt and record

• Photos and video of the damage before cleanup (TDI ↗).
• Damaged items, until the adjuster has seen them.
• Restoration invoices, drying logs and moisture readings.
• Receipts for supplies, hotels and meals if you can't stay home; Triple-I says most policies cover additional living expenses after a covered loss (Triple-I ↗).
• Proof you paid your deductible.

If your claim is denied or the payout seems low, our sister site explains the water damage insurance claim process ↗ in more detail. For disputes, contact your state insurance department or an attorney.

Need help now? Get matched with restoration companies near you.

Frequently asked questions

Does homeowners insurance pay for water extraction and drying?

Usually, if the water damage itself is covered, such as a burst pipe. TDI says your policy should pay for the labor and materials for temporary repairs (TDI FAQ ↗). Keep invoices and drying records.

Will insurance pay if the restoration company bills more than the adjuster's estimate?

Not automatically. Your contract is with the company, not the insurer (DC DISB ↗). Ask the company and your insurer to compare line items, and get approval for extra work in writing.

Is a slow leak under the sink covered?

Usually not. Most policies exclude gradual leaks and seepage (TDI ↗).

Does homeowners insurance cover flood cleanup?

No, most homeowners policies don't cover flood (FloodSmart ↗). An NFIP or private flood policy may, so ask your flood insurer which cleanup costs it covers.

Do I have to use my insurance company's restoration company?

Not always. Texas and DC regulators say you can choose (TDI ↗, DC DISB ↗). Check your policy for a preferred contractor endorsement.

Who pays the deductible?

You do. Triple-I defines the deductible as the amount of loss you agree to pay before insurance kicks in (Triple-I ↗).