Roughly once a month or so, we get asked the question whether septic tanks or wells are covered under a home insurance policy. Generally speaking, most standard home insurance policies written on an HO3 form either do or can provide coverage for these items. The coverage provided is contingent upon a covered peril causing the damage. This mean that a direct physical loss must occur that caused the damage. Examples include lightning strikes, fires, windstorm or hail to name a few. However, what we commonly see is damage from leaks, clogs or tree roots and these are not typically covered in a home insurance policy.
Where should I look on my policy?
The important thing to note here is that most home insurance companies will consider a septic system or well to be an “other structure” which means that you’ll want to ensure you have sufficient Coverage B on your home insurance policy to cover the cost of these structure. Most policies have verbiage that states that an “other structure” is defined as something set apart from the dwelling by a clear space. Even if it’s connected by a fence or utility line it can still be considered an “other structure.” The utility line mentioned could be a sewage line so it’s probably a good practice to purchase ample “other structures” coverage if you have these items on your property.
Anything else?
Additionally, we commonly sewage backup claims associated with septic systems. This is a tough one because sewage backup is generally excluded on a home insurance policy and requires an endorsement to the policy which would add sewage backup coverage. Many recent court decisions have found that coverage should apply regardless of having the endorsement or not. My recommendation, however, is to add the water or sewage backup coverage to your policy if you have a septic system…. don’t leave it to the courts to decide.
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