Warning from state insurance commissioner: Watch out for policies that limit your coverage for water damage

Photo courtesy Washington State Insurance Commissioner

Washington state Insurance Commissioner Mike Kreidler is advising consumers to check their home insurance policies for water damage sublimits.

“A policy with a sublimit may provide lower monthly premiums, but people will be in for a surprise when they file a claim,” Kreidler said. “It’s important to know what you’re paying for and how much, or how little, you could be paying out of your own pocket if your home is damaged.”

Five companies writing home insurance policies in Washington have recently considered selling policies with optional water damage sublimits. A policy sublimit restricts the recovery to a set amount below the total amount of coverage available in the policy.

In this instance, a policy may have a maximum benefit of $500,000, but a $10,000 optional sublimit for water damage. Water damage could include a pipe breaking and releasing water in a house, be it from a sink, toilet, water heater, dishwasher, or frozen pipe.

Adding a water damage sublimit reduces your costs but reduces your protection, too. It also may not meet the property insurance standards required by your lender.

Check your policy for water damage sublimits or ask your agent or broker. If you need additional help or want to file a complaint, contact the Office of the Insurance Commissioner.

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