Water backup coverage

Water backup coverage is an optional endorsement that pays when water or sewage comes up through a floor drain, toilet or sewer line, or when a sump pump fails or overflows. A standard homeowners form such as ISO's HO 00 03 excludes those losses. ISO's endorsement for the job is HO 04 95, and many insurers use their own forms and names.

The coverage is a sublimit you choose when you buy it, commonly somewhere between a few thousand dollars and several tens of thousands. Say you pick $10,000 and a clogged sewer main pushes sewage into your finished basement, causing $18,000 of damage (hypothetical). The policy pays up to $10,000, subject to the deductible, and you absorb the rest. The limit generally sits inside your policy rather than adding to it, and the endorsement usually pays for the resulting damage, not for replacing a failed sump pump.

It does not turn a homeowners policy into flood insurance. Rising river water, rain running across the ground and groundwater seeping through the foundation fall under the flood exclusion and need a separate flood policy. Before you buy, compare the limit with the value of your finished basement. The guide water backup and sewer backup coverage covers the details.