Does Homeowners Insurance Cover Floods?


There are different “options” or endorsements you may choose to add to your Homeowners Policy here in Oregon. One of the most important extensions of coverage for your home is increasing the limit on Water back up and Sump overflow. Additionally in extension options is Fungus, Wet Rot, Dry Rot, and Bacteria. Normally, policies exclude coverage for the presence, growth, spread of any of these things. 

Water Backup and Sump Overflow

What is the Water Backup and Sump Overflow Endorsement? This endorsement provides coverage for damage resulting from water which backs up through sewers or drains or which overflows from a sump, french drain or sump pump, even if the sump pump fails.

An HO3 Homeowners Policy automatically comes with a $5,000 limit for these instances; However, we find that typically isn’t enough. Here at Graybeal Group, every Policy that we write includes a Water Backup and Sump Overflow Endorsement, increasing your limit/coverage to $10,000.

Why should I add this Endorsement?

Depending on the location and age of your home, oftentimes when sewer pipes age and fail it can cause water to reverse course and flow back into your drain, causing damage. Alternatively, sump pumps can fail or become inundated with water from a storm run off, resulting in a damaged foundation or flooded basement.

Water backup can create costly damage to drywall, floors, floor coverings, furniture, personal items, curtains, etc. In the event of this type of claim, we want to ensure that you are not having to pay out of pocket for water remediation.

flood insurance graybeal group

Loss of Use Coverage

Sump failure typically doesn’t make your home unlivable – in other words, despite the damage, you are still able to live in your home while repairs and cleaning take place. However, in the rare occasion that the damage is too extensive and it makes your home uninhabitable, having water backup coverage would qualify you for Loss of Use coverage.

For example:

A storm flooded your basement, causing water damage to your furnace. It is 27 degrees outside and you are unable to heat your home. Now is a bad time to search for flood insurance, or additional homeowners insurance options.

Loss of Use covers additional living expenses, above and beyond a person’s normal living expenses, as well as loss of rent, if that’s the case. If approved by your claims adjuster, this coverage would allow you to occupy a hotel that is paid for by your insurance until the home becomes livable.

How to best prevent water backups

  • Restrain from pouring cooking grease or oils down your drain.
  • Don’t flush paper towels, feminine products, etc.
  • Check your Sump Pump regularly and look for pre-existing drainage issues.
  • If you live in an older home, install a backwater prevention valve.

Fungus, Wet Rot, Dry Rot, and Bacteria

The limits listed are the aggregate limit. Meaning, that limit is the max amount that the insurance company will pay out during a policy period – regardless of how many claims are made, the number of additional locations insured under this endorsement, or the number of occurrences.

Section I Property Coverage limit of liability for the Additional Coverage Fungi, Wet Rot, Dry Rot, or Bacteria $10,000
Section II Coverage E aggregate sub-limit of liability (damages others) for Fungi, Wet Rot, Dry Rot, or Bacteria $50,000


Fungi is classified as any type or form of fungus, including mold or mildew, and any mycotoxins, spores, scents or by-products produced or released by fungi. 

What is covered if fungi, wet/dry rot or bacteria is found? 

Often times there is extensive damage that is unseen. When filing a claim for fungi, wet/dry rot or bacteria damage, the cost of removal is covered. Additionally covered, is the cost to tear out and replace any part of the building or other covered property as needed to gain access to the fungi, wet/dry rot, or bacteria.

The cost of testing for air quality or property to confirm the absence, presence or level of fungi, wet/dry rot or bacteria may be provided only to the extent that there is a reason to believe that there is the presence of any of it. This testing may be performed prior to, during or after removal, repair, restoration, or replacement. 

Loss payable Section I- Property Coverage

Things to be aware of with this endorsement: the coverage only applies when such loss or costs are a result of a peril insured against and only if all reasonable means were used to save and preserve the property from further damage at and after the time of loss. Also, if there is a constant or repeated seepage or leakage of water or the presence or condensation of humidity, moisture or vapor, over a period of weeks, months or years unless such seepage or leakage and the resulting damage is unknown to all insureds and is hidden within walls, ceilings, or under floors.

For more resources regarding home flood insurance!

Graybeal Group, Inc. Offers A Wide Range of Products and Pricing

Graybeal Group, Inc. is a professional Insurance company with licensed agents and staff.  With over three decades of experience, The Graybeal Group takes pride that our agents are specialized in the needs of our customers in the areas of Crop/Agriculture, Hemp, Non-Profits, Pasture Rangeland and Forage, and Farm & Ranch.

Being able to provide the time for our agents to focus on their specialty allows us to give you – our clients – the needed coverage for your home and business. At Graybeal Group, Inc., we are committed to providing an experience that empowers our clients so they are educated on their coverage and the value we provide above all others.

For more information, we invite you to call Graybeal Group, Inc. at (541) 567-5523.