Does Condo Insurance Cover Water Damage? [What's Included]

Finding water dripping from your ceiling and coming home to discover your floors flooded are nightmare scenarios for any condo owner. However, water damage events like burst pipes, appliance leaks, and sewer backups happen all too often. And the costs to repair such damage can easily run into the tens of thousands of dollars.

If you own a condominium, one key question you may have is, "Does condo insurance cover water damage?" Understanding how your HO-6 insurance policy will and won't protect you when water damage strikes is crucial. Can you rely on your insurer to foot the bill? Or might some or most of the costs of mitigating and repairing damage fall directly on your shoulders?

This guide examines exactly what homeowners insurance does and does not cover when it comes to water damage. Learn how to protect your investment and avoid expensive surprises by understanding key insurance terms, coverage limits, exclusions, and rights in different water damage scenarios.

Key takeaways

Responsibility for water damage in condos varies based on the source of damage, condo association rules, and insurance policies.
Condo owners typically own their units, while the association owns common areas and building exteriors.
The Covenants, Conditions and Restrictions (CC&R) and the condo's master insurance policy outline ownership and coverage responsibilities.
HOAs typically cover water damage in common areas, such as shared roofs, walls, hallways, and grounds.
Condo associations are usually responsible for pipes in walls serving common areas or major building structures.
Unit owners are generally liable for pipes solely serving their unit and damage caused by appliances within their unit.
Condo insurance may cover water damage from the upstairs condo if it's not due to negligence or wear and tear.
In cases of water damage from neighboring units, it's advisable to file a claim with your own insurance and contact the condo association promptly.

What type of water damage is typically covered by condo insurance?

Condo insurance, one of several essential types of homeowners insurance, will generally cover sudden water damage events stemming from your unit, subject to your policy limits and deductible. Here are some examples of water damage scenarios typically included:

Burst pipes

If a supply pipe or pipe joint inside your unit's walls, floors, or ceilings unexpectedly ruptures or bursts, your policy will commonly cover extensive resulting damages. This includes water extraction costs, drying out affected areas to prevent mold, tearing out and replacing saturated drywall and flooring, painting, and more. Any personal property, like furniture or electronics, damaged by the water will be covered.

Appliance leakage

Leaking dishwashers, washing machines, refrigerator water lines, and related supply hoses are common culprits. The policy will cover water removal, drying, repairing damaged floors, walls, and cabinets. Be aware of insurance coverage sub-limits for appliances, as these can be $5,000 or less, while appliance replacement often costs much more.

Plumbing issues

Damage from sudden flooding within your plumbing system is generally covered. This includes overflows from toilet or sink backups caused by mechanical failure of internal valves or sudden clogs. Supply line ruptures and detached houses also qualify. Any damage extending beyond the initial source would be handled, subject to deductibles and limitations.

Rain/Water seepage

Are you wondering, “Does condo insurance cover water leaks?” Or perhaps you're dealing with water damage from an upstairs condo? In many cases, repairs are covered if wind-driven rain seeps through window or door frames or enters through exterior cracks and openings, causing interior damage. This also typically includes condo insurance coverage for when a potential roof leak causes interior damage. After your deductible, expenses for mitigation, drywall or flooring replacement, painting, and more may be covered.

Sewer backups

While standard policies exclude sewer backups, optional endorsements to cover damage caused by sewer, drain, or sump pump overflows are critical. If purchased, damage from effluent water backflowing up through pipes would be included up to specified coverage limits, less any applicable deductibles.

Temporary housing

Additional costs for reasonable temporary accommodations while your unit is repaired after a covered water loss are commonly reimbursed for a limited time, such as 6-12 months. Extended hotel stays, furniture rental, and storage fees could all be included up to a coverage maximum.

Limited mold remediation

Many policies provide limited coverage for mold testing and professional mold removal if a covered water damage incident directly causes it. This may be sub-limited, highlighting preventative maintenance.

Take time to review your policy terms, limits, and deductibles related to these types of water damage so you understand exactly what is and isn't covered. Being aware of key inclusions and exclusions is essential to getting the compensation you need while avoiding major out-of-pocket costs.

What type of water damage is not covered by condo insurance?

While condo insurance provides protection against sudden water damage events stemming from within your unit, there are several important exclusions to be aware of:

Damage originating from common areas

Damage that starts in shared building areas like hallways, lobbies, water damage from upstairs condo roofing systems, basement storage, or pipes inside walls is usually excluded from your condo policy. This is because the condo association's master policy insures and handles repairs to common elements. However, your policy may still cover secondary damage extending into your unit.

Natural flooding events

Damage caused by natural floods, heavy rains, and the overflow of outdoor water bodies like lakes, streams, and rivers is universally excluded from standard condo insurance policies. This is because flooding represents a major and catastrophic risk that insurers can't shoulder alone. Floods can affect entire neighborhoods and communities simultaneously.

As such, insurance coverage for condo flood damage requires purchasing a separate annual flood insurance policy. Flood insurance has its own eligibility rules and may vary from one insurer to another, such as requiring an Elevation Certificate showing your building lies outside high-risk floodplains.

Pre-existing or long-term damage

Insurance is designed to cover sudden damage events. Thus, gradual seepage from long-standing leaks, deterioration from deferred maintenance, or damage from issues present before you purchased coverage are often excluded. Make repairs quickly and disclose any known problems. If you repeatedly incur damage from the same issue, like a leaky pipe, and fail to repair it, your claim may be denied. Insurance does not cover long-term negligent damage.

Water backups

One of the most common and impactful exclusions is damage caused by water backflows through sewer pipes, floor drains, and sump pump systems. When heavy rains, clogs, or mainline breaks overwhelm drainage systems, wastewater can back up through pipes and overflow into your unit, causing extensive flooding damage.

Standard condo policies provide no coverage for these backups. Purchasing an optional water backup coverage is strongly recommended. This provides protection against water damage from effluent backup for covered losses up to a specified limit, giving you peace of mind against this major vulnerability.

In the event of a water leak in a condo, who is responsible?

If a condo unit sustains water damage, determining who pays depends on the source and location of the damage:

If the condo’s water damage is accidental and not due to your negligence or lack of maintenance, your condo insurance policy will typically cover repairs and restoration costs. Your insurer will pay out claims for covered damage from your unit, subject to your coverage limits and deductible.
If the source of the water damage is traced to a neighboring unit, you should file a claim with your insurer as soon as possible. Your insurance adjuster can inspect and confirm if the damage originated from the neighboring unit. If so, your insurance provider can collect compensation for your claim from the neighbor's insurance company through a subrogation claim.
If the water damage is due to a leak in a common area, such as shared pipes or structural elements, you must promptly inform the condo association. The HOA's master insurance policy is responsible for covering damage to common areas. However, the HOA may only compensate for repairs based on returning your unit to its original design when built.
If you've renovated your unit or made interior upgrades, the difference between the HOA's compensated amount and the full condo insurance cost may be paid out under your condo insurance policy. Ensure your coverage includes protection for these interior upgrades and improvements beyond the original unit footprint.

The key is quickly determining the source of damage and filing claims with the responsible parties, whether it be your insurer, the HOA's master policy, or a neighbor's policy. Contact all involved parties right away.

How much does water damage usually cost?

Water damage repair costs can vary drastically based on the severity and extent of the damage. But on average, homeowners can expect to pay the following for common water damage events:

Burst pipe repairs - $300 to $5,000+ if walls and floors must be removed
Toilet/sink overflow - $500 to $2,500 if floors and walls are damaged
Dishwasher/washing machine leak - $5,000+, including appliance replacement
Bathtub overflow - $5,000+ if water seeps to lower floors
1-2 inches of flooding - $10,000+, including drywall removal, cleaning, and drying

Other factors impacting water damage costs:

Severity (Classes 1-4) – More extensive damage costs more to mitigate and restore. Class 4 damage from major flooding can cost $20,000 to $100,000.
Type of water – Clean water is cheapest ($3-$4 per sq. ft). Gray water is more ($4-$7 per sq. ft). Black-contaminated water is the most expensive ($7-$7.50 per sq. ft).
Materials affected – Replacing drywall, wood floors, and carpets all add to restoration costs. The more materials impacted, the higher the cost.
Location – Leaks from higher locations, like ceilings, cost more. The geographic region also impacts pricing based on labor rates.
Emergency response – Emergency callouts after hours or on weekends may involve premium rates and fees.

Does condo insurance cover water damage to other units?

If a water damage event originates from within your condo unit and spreads to cause damage in neighboring units, whether your policy covers those damages depends on what caused the initial leak or overflow.

For example, if a supply pipe suddenly bursts in your kitchen without warning and water seeps into the walls, downwards to the unit below, and damages your downstairs neighbor's ceiling, your liability insurance would likely cover the costs to repair their ceiling. This is because the source of the damage was a sudden and accidental incident in your unit.

However, if you negligently caused an overflow by leaving your bathtub unattended for several hours while you went out, and the water leaked down to damage the unit below you, your insurance would not cover any of those damages. Since your negligent actions directly caused the overflow, the liability coverage is invalidated. In this scenario, you would need to cover all repair costs to your neighbor's unit out of pocket.

The key distinction is that condo insurance may cover damages to other units from accidental incidents you could not prevent but not damages directly resulting from your negligence or failure to maintain your home. Being vigilant to prevent overflows and leaks within your walls is crucial to avoid large out-of-pocket repair bills for any impacted neighbors.

What can condo owners do to protect their property against water damage?

While even responsible condo owners can fall victim to unexpected water damage, there are preventative measures you can take to minimize risks:

Conduct thorough walkthrough inspections of your entire unit every 3-6 months, looking for leaks, cracks, or malfunctioning appliances. Also, look for signs of mold or mildew.
Test sump pumps regularly. Address cracked pipes, missing grout/caulk around showers and tubs, leaky faucets, or faulty water supply lines immediately.
Maintain appliances properly, such as routinely checking water heater pipes and changing dishwasher hoses every 5-7 years. Only run washing machines when home.
Install water sensors or smart leak detectors to alert you at the first sign of a leak. Some can even automatically shut off water.
Please inform the condo association of any leaks you experience in common walls, pipes, or ceilings so they can investigate larger issues.
Review your condo policy annually and verify you have adequate coverage for water leaks, sewer backups, loss of use, and more.

When leaks occur, proactive maintenance and quick response can help contain damage and minimize what your condo insurance policy has to cover.

Still have questions?

Wish to learn more about the condo insurance coverage for water damage? Here are answers to common questions about who's responsible for repairs and damages in various scenarios.

In what cases does my HOA become liable for water damage from the condo above me?

Suppose the source of the water damage is a common element maintained by the HOA, such as a roof, exterior wall, pipe within a common wall, or underground main drain line. In that case, the HOA's master insurance policy is usually responsible for covering the cost of repairs.

There's a leak in my condo's ceiling - who is responsible for this type of water damage in a condo?

Your neighbor's condo insurance policy should cover damage starting in their unit, even if it spreads to other units. You would initially file a claim under your policy, and your insurer would subrogate the loss under your neighbor's policy.

If in a condo there’s a leaking pipe in the wall, who is responsible for this type of condo water damage?

Since pipes inside walls are generally considered part of the building’s common elements, the condo association’s master policy would cover repairs to in-wall pipe leaks. Your policy covers damage inside your unit.

Does my HOA’s master policy cover mold remediation if water damage from the upstairs condo causes mold growth in my unit?

The master policy may cover mitigation and repairs to prevent mold growth in common areas. But, your policy would cover any mold cleanup or remediation needed inside your condo unit due to water damage.

What should I do if my condo sustains water damage from the roof?

Contact your insurance provider immediately, document the damage, and notify your condo association for repairs and mitigation.