Homeowners Insurance Septic Tank Coverage: How It Works

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  • Water backup coverage is a common home insurance rider that protects against leaks and other unexpected water damage.
  • It’s essential to understand the difference between flood insurance (natural disasters) and water backup coverage.
  • Homeowners insurance does not cover neglect, which could include long-standing leaks or wear and tear.

While regular maintenance is crucial to keep your septic system operating properly, unforeseen disasters can cause significant damage. Purchasing enough insurance including water backup coverage for your septic tank could reduce or eliminate the cost of repairs when you need it most.

What is a septic tank?

The US Environmental Protection Agency (EPA) defines septic systems as, “underground wastewater treatment structures, commonly used in rural areas without centralized sewer systems.

You probably already know if you own a septic system. If you aren’t sure, the EPA identifies four ways to determine if you do.

  1. You use well water.
  2. The waterline coming into your home doesn’t have a meter.
  3. Your water or property tax bill displays a “$0.00 sewer amount charged”
  4. Your neighbors have a septic system.

To find your septic system, the EPA recommends looking at your home’s “as-built” blueprint, checking your yard for lid and manhole covers, or contacting a septic system service provider to help you find it.

Does homeowners insurance cover damage to your septic tank?

Homeowners insurance covers septic tanks with exceptions that vary among providers. However, damages can only be covered as part of a claim for a covered loss (ex: after a fire, your homeowners insurance may replace your septic tank). Therefore, it is important to speak with your insurer about septic coverage.

Most homeowners insurance companies cover septic tanks under “other structures” protected by dwelling coverage. Other structures are elements of your property not attached to your house. If your septic tank causes flooding and water backup, on the other hand, your water backup coverage would repair the damage and pay for mold remediation and other preventive measures insider your home. It’s important to know neither other structures coverage or water backup covers routine maintenance (wear and tear) or neglect (an older system that isn’t properly maintained leading to a leak).

What damage to your septic tank does homeowners insurance cover?

Homeowners insurance providers will generally cover your septic tank up to the policy limits under “other structures.” Damage to your septic tank must result from insurance perils listed in your policy to qualify for coverage.

Some common insurance perils include:

  • Fire
  • Lightning
  • Theft
  • Ice
  • Snow
  • Sleet
  • Smoke
  • Vandalism
  • Freezing

If the septic damage is unexpected and related to a covered peril, your homeowners insurance will cover it. While some hazards could plausibly center around the septic system, most claims are part of a larger claim for your primary home structure. Check with your homeowners insurance company to see how they handle septic tank issues as they may vary.

What damage to your septic tank does homeowners insurance not cover?

If the damage is from a lack of maintenance or wear and tear, you will not be covered.

Most damage to septic tanks is due to human error, such as flushing grease or oils, driving over the tank, or tree roots growing around pipes. Be sure to perform regular maintenance to avoid septic tank issues. While you might assume your insurance company won’t know, repair professionals are obligated to report signs of something as simple as the wrong wipe being flushed, at which point your claim would be denied.

How much does it cost to replace a septic tank?

The cost to replace a septic tank for a conventional system can run between $3,000 to $7,000. Alternative systems can cost even more, according to the EPA. It’s always a good idea to have enough coverage for large expenses. But this becomes even more important if you can’t reasonably afford to pay thousands of dollars for a new septic system.

Most insurers set other structure coverage limits at 10% of your dwelling coverage, according to the Insurance Information Institute. So if your home’s replacement cost coverage is $400,000, your limit would be $40,000. While that may be more than enough to buy a new septic tank, remember that the limit also applies to other parts of your property not attached to the main structure, such as fences, detached garages, fences, and swimming pools.

Additionally, most homeowners insurance policies will not cover damages caused by wear and tear, floods, or earthquakes. So, it may be smart to purchase specialty coverage with your homeowners insurance policy. Depending on your state, flood zone, and other factors, a local insurance agent can make recommendations and help you compare quotes.

2 additional types of coverage for your septic tank

1. Home warranty

A home warranty contract may be an option to reduce maintenance and repair costs for your septic system. Home warranties are service contracts to repair or replace items like your HVAC and water heater. A home warranty can cost $350 to $700 a year. If you just purchased your home, your realtor may have recommendations for preferred companies in your location. However, it pays to do your own research as well. A few popular home warranty companies are American Home Shield, Landmark Home Warranty, and Choice Home Warranty.

2. Service line coverage

As a homeowner, you are responsible for maintaining your service lines. Service lines are utility lines or pipes that give your home electricity, gas, water, and sewer functions. Your homeowners insurance provider may have a service line endorsement that covers your septic pipes from damage.

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