Sewer backup coverage is an additional coverage that can be added to a standard policy at an additional premium. It is also commonly refered to as water backup coverage. The cost will depend greatly on how much coverage is being requested. Typically it will range anywhere from $50 to $250 in additional premium.
Sewer Backup coverage is absolutely necessary if you have a finished basement and/or a sump pump. Remember many sump pump’s stop working when the power goes out!
Jim and Nancy just finished remodeling their basement. They did a complete finish including furnishing and drywall. When all is said and done they had invested $20,000 into the final product. They have been living in the house for 10 years now and have an active homeowners policy with replacement cost coverage. After several weeks of rain, one of the drains near the washing machine began to backup. The entire basement was flooded. The water level reached up too 6 inches up the drywall causing irreparable damage. Nancy immediately called to place a claim with their home insurance company. She was terribly surprised to learn that their was no coverage for this major damage!
Unfortunately the insurance company will not pay out for this claim. It is extremely important for a homeowner to call their current insurance provider when they upgrade their home. Firstly, it ensures the proper coverage of your home. Secondly, no one in the insurance industry wants to have this conversation with one of their customers. Insurance agents have no way of knowing when upgrades occur at your home. Jim and Nancy would of had coverage to the limit of liability they chose when purchasing the additional coverage. This includes but is not limited to personal property, mold remediation, and additional living expenses.