Insurer Advises Sump Pumps with Battery Backup As Flooding Nears

Considering the storms that hit many parts of the country in March through May last year, ACE Private Risk Services is advising consumers to protect their homes from basement flooding by installing a properly sized sump pump with a backup battery power supply.

The firm, which writes the ACE Group’s high-net-worth personal lines business, said such products could reduce water damage due to sump pump failure during intense storms, when water inflow peaks and falling trees cut power lines.

Consumers should also check to see if their homeowners insurance policy will cover such losses.

For luxury homeowners ACE Private Risk Services insures, the cost of repairs when the sump pit overflows averages $38,000 – far more than a plumbing leak ($20,000) or roof leak ($6,000). Also, when the sump pump stops working completely due to a power outage, the average cost increases to $50,000.

“For affluent homeowners who often turn their basements into high-tech entertainment centers, the cost of repairs due to sump pump failure can be surprisingly high. One of our clients recently suffered damages estimated at $350,000, not including the emotional impact it had on the family,” said Bob Welther, assistant vice president, at ACE Private Risk Services.

Welther said his company’s homeowners policy covers damage when surface water from heavy rain or melting snow overwhelms the drainage system and causes the sump pit to overflow, but most policies will not—unless a special endorsement has been added. Also the endorsement may only cover losses up to $5,000.

“So it’s very important for homeowners to check that adequate coverage is in place for sewer and drain backup. Otherwise, they could be exposed to significant financial risk,” he said.