Insurance coverage for flooding and mold in basement

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My tenant moved out without telling anyone. My property manager finally figured it out when they stopped by to check on things and saw that the property was vacant. They went in and said that the property was in decent shape and that they will clean it up and get it rented ASAP.

Three weeks go by and I start asking questions. They finally send someone back out to look at the property again, and this time they tell me the basement had been flooded and there is mold growing up the walls.

I'm not real pleased with how the PM treated things, but now I need to deal with insurance. I talked to my agent and he is telling me:

1) If it is a sewer backup - NOT covered

2) If the tenant left the toilet running and it overflowed onto the carpet, then it might be covered.

Has anyone dealt with insurance on anything like this? What was your experience?


Yep, sewer back up is an additional rider, some buy it, some don’t.

Seepage and/or sump pump failure is likely not included. We don’t know where this property is, or the typical “flooding” causes there, you need to find out the cause regardless, of course.  And upper floor plumbing leak should be somewhat obvious.

As Wayne said, you need to start by finding the cause of the water.  A busted pipe or appliance should be covered.  Other causes will be at the mercy of your policy.  The big cost will be the mold treatment.  If the cause of the leak is covered by insurance, then the mold remediation will probably be covered, too.  If not, be prepared for a high contractor bill...  

Another potential problem here is that the property was vacant.  This is why insurance carriers do not like vacant properties because no one is there to stop something like a simple water leak.  Your policy will probably have a clause in it that says a claim is not covered in a house vacant for more than 30 or 60 days.  I hope it's not been that long...

As an investor, I avoid property management companies like the plague because of situations like this.  Good luck.  Feel free to call me if you'd like to get an insurance agent's feedback on anything.