Most property forms, including the typical Homeowners (HO-3) policy, under SECTION I – PROPERTY EXCLUSIONS, exclude “water damage” caused by:

Water below the surface of the ground, including that which exerts pressure on, or seeps or leaks through a building, wall, bulkhead, sidewalk, driveway, foundation, swimming pool, hot tub or spa, including their filtration and circulation systems, or other structures.

To keep Homeowners policy premiums low and affordable for everyone, coverage is not afforded to losses that can be prevented by sound building practices or as a result of normal wear and tear rather than sudden and accidental events. So, the main reasons it is necessary to exclude “water below the surface” from a Homeowners policy are:

1. Current construction methods require the foundation to allow water to drain away from the home. Older homes may not have followed these methods or due to improper grading, the shifting of the soil or past severe water events, water may find a path to begin collecting underground next to the home. If the intrusion of water through foundations were covered by insurance, then a home owner would have no incentive to correct the problem. Covering these events would give rise to repeated claims after every periodic severe weather season.
2. Over time, every foundation settles, cracks, and eventually deteriorates. This “wear & tear” may require a home owner to excavate around the foundation (and basement) to place drain tiles and patch/re-seal the foundation and basement concrete walls. Again, if this type of water loss was covered then a home owner would have no financial incentive to repair or improve their home.

For answers to related questions click: WATER DAMAGE ~ Am I Covered?