Understanding Water Leak Responsibility: Who Bears the Cost?

Oh no, you’ve got a water leak! That’s never a fun situation to deal with. As water damage spreads and repair bills add up, the big question is – who pays for a water leak? Will your homeowner’s insurance cover a water leak? Or will you be stuck paying out-of-pocket? You may also be asking yourself, what to do if water is leaking?

I, the great Sherleak Holmes, have been there myself, frantically calling my insurance agent wondering if they’ll help pay for busted pipes or appliance leaks. After dealing with more than my fair share of water leaks and water damage, I have learned when insurance will pay for the damage and when I am stuck paying for the bill, which usually means Watson will be stuck paying the bill.

Let’s get out our magnifying glass and look at your homeowners insurance policy (I hope you have homeowners or renters insurance!)

Does Homeowners Insurance Cover Water Leak Damage?

Devil Insurance Company Agent

In most cases, basic homeowners insurance will cover damage caused by unexpected water leaks. We’re talking about water leaks from sudden events like frozen or burst pipes, appliance malfunctions, and rainwater seeping in from the roof or basement.

These types of water leaks are usually covered under your homeowner’s policy’s section for water damage. The specifics will depend on your insurance company and policy details, but you can generally expect coverage for:

  • Leaking or bursting pipes. If pipes freeze and crack in winter or suddenly burst from the pressure, your policy will typically pay for water damage to your home and belongings.
  • Appliance leaks. If your water heater cracks, the washing machine hose bursts, or the refrigerator ice maker overflows, the resulting water damage is often covered.
  • Roof leaks. Damage from rainwater seeping through the roof is commonly covered.
  • Basement water damage. If groundwater backs up into your basement or heavy rain causes flooding, insurance will usually pay.
  • Emergency repairs. Most policies cover temporary repairs needed to stop the water leak, like patching holes or sealing off damaged areas.

Water damage coverage is not unlimited though. Your provider will pay up to your coverage limits, so review your policy and know the caps. Make sure you have adequate coverage for your home’s value.

When Does Homeowners Insurance NOT Cover a Water Leak?

While standard homeowners insurance covers damage from unexpected water leaks, not all water damage is covered. Here are some common water leak scenarios that your policy likely won’t pay for:

  • Slow leaks over time. If water slowly leaks from an old pipe or appliance seal over weeks or months, causing damage, your insurance will often deny coverage. Why? Because you “should have known” about a gradual leak.
  • Faulty home materials or construction. Damage from leaky roofs, pipes, and seals due to faulty installation, construction materials, or improper home maintenance is generally excluded. It’s your responsibility to properly maintain your home.
  • Appliances themselves. While the water damage appliance leaks cause is often covered, your policy likely won’t pay to repair or replace the faulty dishwasher or other appliance itself.
  • Sewer or drain backups. Damage from sewer lines backing up is excluded by most basic policies since it’s considered predictable and preventable by proper maintenance. You need special sewer backup coverage.
  • Flooding. Homeowners insurance typically won’t pay for flooding damage, which is defined as water rising from the ground up. You need separate flood insurance for that.

Bottom line – basic homeowners insurance is designed to cover sudden water leaks you couldn’t predict. But long-term seepage, flooded basements, faulty construction, and the appliances themselves usually aren’t covered.

How Much Does Homeowners Insurance Pay for Water Damage?

If your water leak is covered, how much can you expect your homeowner’s insurance to pay out? It depends on your coverage details and your deductible, but often includes:

  • Repairing the source of the leak. Your policy will cover repairs to fix the origin of the damage, like patching broken pipes, fixing appliance hoses, or sealing leaky windows.
  • Damaged areas. Your homeowner’s insurance policy should cover the cost of repairing walls, floors, and other damaged areas, such as drywall, warped floors, and stained carpets.
  • Belongings. It will pay to clean or repair your personal property damaged by the water. For major damage, there are limits to how much it will pay to replace belongings. Make an inventory list.
  • Hotel or housing. If your home is unlivable during repairs, your policy often covers hotel stays for a certain period of time.
  • Mold removal. Insurance typically pays for professional mold removal and remediation if water causes mold growth.

There are always policy limits though. For damage to your home and property, most providers won’t pay beyond your dwelling and personal property coverage limits. Know your limits so you don’t expect more than your insurer will pay.

What If My Homeowners Insurance Won't Pay for a Leak? How to Handle Costs

Mobster meme for an insurance company that does not want to pay for water damage

If your water leak isn’t covered by insurance (or they are refusing to pay), it unfortunately means footing the bill yourself. Here are some tips to handle unexpected water damage costs on your own:

  • Inspect the damage thoroughly. Determine the exact areas impacted and repairs needed so you know the full scope and can get accurate quotes.
  • Get multiple repair estimates. Shop around with contractors to find competitive pricing on repairs.
  • Ask mobster friends to provide aggressive negotiation services.
  • Talk to an attorney who works on a contingency fee basis. Although insurance companies seem like they are your best friend in TV commercials, the truth is they want to pay as little as possible for claims. They will often lowball you and use other shady negotiation tactics to get out of paying for your repairs or paying as little as possible. Therefore, if you think your insurance company is not being fair, contact an attorney. An attorney can often get you far more money for repairs by negotiating with your insurance company than you can.
  • Ask about payment plans. Many companies allow you to pay for big repairs in installments over time instead of one lump payment.
  • Finance with low-interest credit cards. Consider putting repairs on a credit card with an intro 0% interest period so you have over a year to pay it off without incurring interest.
  • Tap emergency savings if needed. While painful to dip into savings, major home repairs are exactly what an emergency fund is meant for.
  • Take out a personal loan. For massive water damage, personal loans allow you to finance repairs at lower interest rates than high-limit credit cards.
  • Increase your coverage. After a leak isn’t covered, reassess your homeowner’s policy limits and coverages. It may be worth updating your policy to avoid another denial down the road.


Dealing with extensive uninsured water damage is stressful, I know! With some planning though, you can handle the costs. And now you know exactly when your homeowner’s insurance will cover water leak damage versus when you’ll have to pay the bill.

Here’s hoping you never have to deal with a bad water leak. But if you do, now you’re prepared and know who to call for help covering the damage – your insurance agent, an attorney, or your credit card company!

Want to know if your water leak is a major one? Learn more by reading our blog post, what is considered a major water leak.