If you’re an Illinois homeowner and you have a basement, specifically a finished basement, you could be sitting on a ticking time bomb.
I don’t mean that literally, of course, but financially, the risk is very real. If you have a finished basement, or any basement where you store personal property, you need to know how standard insurance policies handle water damage. In our own home, we have a gym downstairs; it’s not fully finished, but we still have valuable equipment down there.
Here is the inconvenient truth about home insurance in Illinois: If you experience any sort of water backup from a drain, sewer, or sump pump failure, your standard homeowner’s policy does not automatically have coverage for this. It specifically excludes these events without special endorsements.
At The McBride Agency we serve homeowners all across Illinois. We help clients every day navigate the complexities of their coverage to ensure their largest assets are protected. Let’s walk through how you can mitigate these risks and ensure you aren’t left holding the bag after the next big Illinois thunderstorm.
The Physical and Financial Consequences of a Sump Pump Failure
When a standard homeowner’s policy excludes things like sump pumps, that means if a heavy rainfall overwhelms your system, or if the electricity goes out and your pump stops working, the resulting water damage is entirely your financial responsibility.
The True Cost of Rebuilding
I’m going to be very clear about the “meat and potatoes” of this issue. Most homeowners, if they have backup of sewer and drain coverage at all, only have a nominal amount, perhaps $5,000 or maybe even $10,000 worth of coverage.
You likely feel comfortable because you see “Water Backup” listed on your policy. But what is going to bite you in the backside is the adequacy of that limit.
Consider what you actually spent to rebuild or remodel that basement. You may have spent $30,000, $40,000, or even $50,000 on the renovation alone. If 2 feet of water fills that space, a $5,000 endorsement, especially after you pay a $500 or $1,000 deductible, isn’t going to solve the problem.
Calculating the Damage
Water backup may not destroy the foundation walls, but think about everything that has to be torn out and replaced. If you have water sitting in a finished basement, you have to consider:
- All of the carpet and padding must be removed.
- Drywall must be cut out at least 12 to 16 inches up (or more) from the floor.
- The 2×4 studs inside the walls can absorb water and require professional mitigation or replacement.
- All the personal property (furniture, electronics, gym equipment, stored memories) that is now damaged or destroyed.
Your policy needs to be structured to protect you against the total reality of that loss.
The Total Cost of Risk Management Approach
As far as home insurance goes, our job at The McBride Agency is to help you protect your risk and find the right balance for risk management.
Finding the Right Balance
We want to find that balance between “all out of your pocket” and “all out of ours.” When we discuss insurance, we aren’t just selling you a policy; we are discussing the Total Cost of Risk Management. This means evaluating not just the premium you pay, but also the potential out-of-pocket costs you face when a claim occurs.
It is your responsibility as a homeowner to mitigate damages when they occur. By structuring your policy correctly and implementing loss control measures in your home, we manage that total cost of risk together.
Proactive Mitigation: Stopping the Bomb Before It Ticks
If you want to reduce the likelihood of a claim, or at least minimize the severity of one, there are several things you can do to manage that risk in your Illinois home.
Install a Dual Pump System
Number one, get a dual pump system. This is one of the best ways to mitigate risk and avoid system failures. If your primary system fails due to mechanical breakdown or if the volume of water is too high, you have a second one that can back it up. This redundancies significantly decreases the chance of a total loss.
Utilize Water Alarms and Smart Sensors
Get a water alarm that actually has a trigger. If the system senses additional water coming out of extra pipes or rising too high in the basin, it can set off an alarm.
Better yet, you can now get smart sensors that send alerts directly to your phone. These work out incredibly well. Even if you are away from home, you can be alerted to a failure immediately, allowing you to react quickly, call a neighbor, or get a plumber out before the water is 2 feet deep in your finished living room.
Securing the Right Sump Pump and Water Backup Insurance
The best thing you can do right now is look at your policy or talk to your agent about the backup of sewer, drain, or sump pump coverage endorsement for your home insurance policy.
Review Your Endorsement Limits
If your homeowner’s company doesn’t offer adequate limits for this endorsement, we have options. We can look at separate, standalone policies where you can get water backup coverage specifically tailored to the value of your finished basement and its contents.
Don’t assume that just because you have the endorsement, you are fully covered. If you have a finished basement in Illinois, you likely need far more than the standard $5,000 or $10,000 limit.
If you have any questions about this, or any other coverages give us a call, we can help you find that perfect balance of coverage for your risk.
