# Water Damage Legal Liability Insurance: What It Is, How It Works

![Man on a cellphone holds up a metal pail while water sprinkles from above.](https://www.investopedia.com/thmb/YNqZyy8K_lTL1fxalW2EOrvlk4g=/1500x0/filters:no_upscale():max_bytes(150000):strip_icc()/GettyImages-1296737106-373f5b9cc8c942da969f27707e9bf33e.jpg)

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## What Is Water Damage Legal Liability Insurance?

Water damage legal liability insurance refers to a type of policy that provides financial protection to a person or business that unintentionally causes water damage to another [property](https://www.investopedia.com/terms/p/property.asp).

For individuals, water damage legal liability insurance and the cost of it are typically included in renter, homeowners, and condo insurance policies.

### key Takeaways

*   Water damage legal liability insurance protects individuals or businesses if they cause unintentional water damage to someone else's property or possessions.
*   Many homeowners and renters insurance policies include legal liability coverage for water damage.
*   To be covered, the water damage usually has to be caused by a sudden event or accident.

## How Water Damage Legal Liability Insurance Works

Water damage legal liability insurance is a kind of [liability insurance](https://www.investopedia.com/terms/l/liability_insurance.asp). Liability insurance is a type of coverage that protects an individual or business from the risk of being sued or held legally responsible—that is, [liable](https://www.investopedia.com/terms/l/liability.asp)—for something.

Liability insurance policies can cover both legal costs and any payouts for destruction, damage, or injury, however inadvertent, for which the insured is deemed responsible. There are various situations when water damage legal liability insurance could help protect an individual from enormous costs.

For example, let's say the owners of a second-floor condo unit experienced a water heater explosion and the water leaked into the first floor. Water damage legal liability insurance would protect the owners of the second-floor condo by providing the money to repair the damage to the first-floor units. Without the insurance, the second-floor owners could be held responsible for paying for the repairs out of pocket.

## Homeowners Policies and Water Damage Legal Liability Insurance

[Homeowners insurance](https://www.investopedia.com/terms/h/homeowners-insurance.asp) policies generally include water damage legal liability, either as part of the personal liability coverage or in a separate rider. If you have a mortgage loan, your mortgage lender will likely require you to buy homeowners insurance, but not mandate a separate policy for water damage liability.

Generally, the water damage must result from a sudden event or accident—something unforeseen and inadvertent, like a leaking air conditioner, burst pipe, malfunctioning washing machine, or the aforementioned water heater rupture. The liability extends to damage, destruction, or injury to others' structures, belongings, or even persons.

However, if the triggering event and ensuing water damage are caused by poor maintenance, misconduct, or deliberate carelessness, the liability [coverage](https://www.investopedia.com/terms/i/insurance-coverage.asp) might not apply, or your insurance company might reject the claim.

> **Warning**
>
> Be aware of policies that limit your coverage for water damage and liability. Some homeowners insurance policies have sublimits within the contract that impose a cap on claim payouts associated with water damage.

## How to Increase or Improve Coverage

Not all policies include legal liability insurance for water damage legal liability insurance, so it is important to read the insurance contract carefully.

### Increase Coverage on Your Existing Policy

A more common issue is not the existence of the coverage but the extent of it. Most standard homeowners policies provide a basic limit of liability of $300,000 for property damages or injuries. This coverage amount can be increased for an additional premium, but often only to a specified limit.

### Umbrella Policy

If you want broader liability coverage than that provided by your homeowners insurance, you could purchase what is commonly called an [umbrella insurance policy](https://www.investopedia.com/articles/personal-finance/040115/how-umbrella-insurance-works.asp). Personal liability insurance makes payments on the policyholder's behalf in cases of at-home and auto accidents, as well as situations that involve libel, slander, vandalism, or invasion of privacy. The policy also covers injuries that occur at secondary residences or seasonal homes, within recreational vehicles, on the premises of [rental properties](https://www.investopedia.com/terms/r/residentialrentalproperty.asp), or on a boat or watercraft owned by the policyholder.

## Frequently Asked Questions (FAQs)

## How Does Water Damage Legal Liability Insurance Work?

Typically, water damage legal liability insurance protects you if water damage results from a sudden event or accident like a burst pipe or a broken washing machine. The liability protects you financially from damage caused to other people and their property.

## How Do I Increase My Water Damage Legal Liability Insurance?

The standard homeowners insurance policies usually provide a basic limit of liability protection for water damage. You can increase the coverage, but it will also increase your monthly premium. You can also buy an umbrella policy, which provides broad coverage of personal liability, including slander, libel, accidents, and water damage.

## What Claims Are Not Covered by Water Damage Legal Liability Insurance?

If the event causing the water damage resulted from poor maintenance, malfeasance, or deliberate carelessness, the water damage liability coverage might not apply, meaning the insurer would deny the claim.

## The Bottom Line

Water damage legal liability insurance provides an owner financial protection from accidents and unforeseen events that cause water damage to other people or their property. Typically, the standard homeowners insurance policy includes water damage legal liability insurance, but you can increase the coverage as needed.  

> **Article Sources**
>
> 1.  Texas Department of Insurance. "[When Are Water Damage and Mold Covered by Insurance?](https://www.tdi.texas.gov/tips/when-are-water-damage-and-mold-covered-by-insurance.html)"
>     
> 2.  Washington State Office of the Insurance Commissioner. "[Watch Out for Insurance Policies That Limit Your Coverage for Water Damage](https://www.insurance.wa.gov/news/watch-out-insurance-policies-limit-your-coverage-water-damage)."