Home Insurance For Water Damage Claims: How To Choose The Right Plan

The rainy season may be here to stay for a while (according to the Meteorological Service Singapore), at least until the beginning of 2024, we can expect a spike in water damages to homes in Singapore. As homeowners, we’ll need to brace ourselves for the effects of the El Nino such as the increase of the likelihood of water seepage and leakage in HDB flats (which happened back in 2021 and 2022 during the months of October, November and December).

One of the essential steps to take is to relook at your home insurance coverage, especially for water damage claims, just to be better prepared. Here’s a quick guide on how to pick the right home insurance plan with suitable water damage coverage that you and your home may need.

Is Water Damage Coverage Necessary In Home Insurance?

Water damage is a common and potentially costly risk for homeowners in Singapore. Thus, having coverage can help protect your home and personal belongings from damage caused by various water-related incidents like ceiling leaks and water seepage, although it isn’t a mandatory one unlike fire insurance for HDB flats.

Common risks of water damage in Singapore

There are a couple of common types of water damage and these include:

Ceiling leaks

One common cause of ceiling leaks is water seeping from the unit above, making its way through the concrete floor slab to the ceiling of the lower floor. Typically, the culprit behind such leaks is the deterioration of the waterproof membrane and screed within the floor slab. For residents residing on the top floor, ceiling leaks may stem from the wear and tear of the roofing material atop their HDB block or private condominium or landed property.

Heavy rainfall

During and after periods of intense rainfall, water run-off becomes a concern, particularly during the monsoon season spanning from November to January. If you’re living in older HDB estates or private properties, you may grapple with this issue, exacerbated by the incessant rain impacting the external walls. This is because water leakage is often prevalent in older buildings and areas with high moisture levels, such as toilets and bathrooms.

Damaged water supply

Another factor contributing to ceiling leaks and water seepage is damage to the water supply system. Burst or leaking pipes, either due to aging or improper renovation works by contractors, can lead to leaks. Additionally, worn-out toilet wax rings may result in leaks when flushing, allowing water to seep through and accumulate behind walls and pipes over time.

Protection against common risks and other benefits

As repairing or replacing property damaged by water can add to your monthly expenses, having water damage coverage provides a financial safety net, helping you cover the costs of restoration and replacement and provide benefits including:

Comprehensive coverage options

Many insurers offer additional coverage options for specific water-related risks, such as flood insurance, sewer backup coverage, and sump pump protection. These options allow you as a homeowner to tailor your coverage to address specific concerns.

Mitigating risks beyond standard coverage

Standard policies may have limitations on coverage for certain types of water damage, such as flooding. By investing in additional coverage, it can ensure that you are protected against a broader range of risks.

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Buy Home Insurance

Step 1

Understand policy inclusions and exclusions

Thoroughly review the insurance policy to understand what types of water damage are covered and any exclusions. Be aware of specific events, such as floods or earthquakes, that may require additional coverage.

Step 2

Evaluate coverage limits

Assess the maximum coverage limits for water damage. Ensure the policy provides adequate coverage to address potential repair or replacement costs, especially if you own valuable belongings that could be affected.

Step 3

Consider additional water damage riders

Some insurers offer optional riders or endorsements to enhance water damage coverage. Evaluate these options, such as sewer backup coverage or sump pump protection, to tailor the policy to your specific needs.

Step 4

Research on the insurer’s reputation

Investigate the reputation of potential insurance providers. Look for customer reviews, ratings, and feedback to gauge their responsiveness and reliability when it comes to processing water damage claims.

Step 5

Ask about deductibles

Gain information about the deductibles associated with water damage claims. While opting for a higher deductible might result in lower premiums, it could also mean higher out-of-pocket expenses during a claim. Strive to find a balance that aligns with your financial circumstances.

Step 6

Explore discounts and bundling options

Inquire about potential discounts related to home safety features, such as a monitored alarm system or leak detection devices. Additionally, investigate the possibility of bundling your home and auto insurance with the same provider, as this may make you eligible for extra savings.

Step 7

Evaluate personal property coverage

Ensure that your insurance policy sufficiently covers personal belongings affected by water damage. Conduct an inventory of valuable items, and if needed, contemplate securing additional coverage or a separate policy specifically for high-value possessions.

Flood damage

Home insurance policies generally do not cover damage caused by floods, including those resulting from hurricanes, tsunamis, storm surges, or overflowing rivers. You can consider obtaining separate flood insurance for such scenarios, but it is generally not really necessary in Singapore unless your home is on the ground level or lower floors of the building.

Repairs to the source of water damage

The expenses incurred in repairing or replacing the cause of water damage, such as fixing a malfunctioning dishwasher or washing machine, are typically not covered.

Damage due to negligence or lack of maintenance

Instances of water damage resulting from neglect, like failing to address plumbing issues or not maintaining adequate heating during freezing temperatures, are often excluded.

Water damage from earth movement

Damage caused by events like earthquakes, landslides, or mudslides is generally not covered. To protect against earthquake-related water damage, a separate earthquake insurance policy is necessary.

Intentional acts

Water damage resulting from intentional acts, such as arson or purposefully turning off the heat in winter, is not covered by homeowners insurance.

Damage from swimming pools or other structures

Leaks from structures like swimming pools are typically excluded from coverage.

Foundation-related leaks

Water damage resulting from seepage or leaks through a foundation is generally not covered.

Sump pump failures and related equipment

Damage caused by sump pump failures or associated equipment is often not covered. Consider obtaining specific coverage for sump pump and water backup issues.

Sewer or drain backup

Unless a separate coverage is purchased, homeowners insurance typically excludes water damage caused by backup through a sewer or drain.

Frequently Asked Questions

Why should I get home insurance with water damage coverage?

Having water damage coverage in your home insurance plan can help you claim for any damage costs of your home and personal belongings caused by various water-related incidents like ceiling leaks and water seepage. However, it isn't mandatory by law unlike fire insurance for HDB flats.

Is higher deductible a better option for my home insurance claims relating to water damages?

Yes and no. While opting for a higher deductible might result in lower premiums, it could also mean higher out-of-pocket expenses during a claim. Strive to find a balance that aligns with your financial circumstances.

Are additional water damage riders for home insurance plans necessary?

Yes and no. This depends on your property type and needs of your home. Some insurers offer optional riders or endorsements to enhance water damage coverage. Evaluate these options, such as sewer backup coverage or sump pump protection, to tailor the policy to your specific needs.

Additional water damage riders are often more helpful for those owning private properties, especially those with basements. Most sump pumps are installed in the basement of landed properties and will pump water away from their houses in the event of a flood.