Does homeowners insurance cover water damage or earthquake damage?

The question as to whether homeowners insurance covers earthquake damage is more straightforward. Standard insurance policies do not cover this.

You will need to buy separate earthquake cover. In some areas, you can do this by getting the cover directly from the insurance company. However, it's a different story for earthquake-prone areas; where insurance companies are naturally loathe to issue such a policy. You may need to go to an insurance exchange or high-risk pool to get this coverage.

However, the question on water damage is more complicated. There are various instances that can fall under water damage - some may be payable under the policy, some may not.

Here is a short rundown of the various instances of water damage:

• Floods. Again, this is not covered in a standard policy and you will have to get separate flood insurance coverage. This is a natural disaster and most homeowners insurance policy will not provide coverage for damage or loss due to floods.
• Damage caused by a pipe bursting. This is not covered by the policy. The policy will usually not pay for all items that were damaged by the burst pipe. This is because the damage is due to poor maintenance and not due to a covered cause such as a storm.
• Damage caused by a leaking roof. If the leaking is caused by a roof that has not been maintained, the insurance will not cover this. However, if the roof leaked because part of it was blown away in a storm, the insurance company will usually pay not just for the damaged items but also for the roof itself.

  The key words here are sudden and unexpected. If you don't maintain your roof and have it regularly checked and repaired, the roof's deterioration actually happened over time (e.g. not sudden). You will also have a reasonable expectation that it will leak due to bad maintenance.

• All gradual water damage, including mold damage. In the same token, homeowners insurance will not pay for any damage that is gradual, such as mold spores accumulating in your basement or damaged carpets/wood flooring due to a leaking hose from the refrigerator. The insurance will not pay to have the faulty leak repaired, as well as any damage that ensued from this leak.

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