Sewer backup
A pipe backs up and floods a unit. Find out before the call, not during it, whether anyone's insurance actually responds.
Sewer and sump pump backup is excluded by default from both a standard HOA master policy and an individual owner's HO-6 policy. Coverage exists only if someone adds it back by endorsement, and that endorsement often also raises the owner's loss assessment limit. Check your policies before you assume backup is covered.
The exclusion is the default, not the exception
Sewer and sump pump backup is not a rare carve-out buried in fine print. It is excluded by default from standard property and homeowners forms, on both the association's master policy and an owner's individual HO-6 policy. Nobody has to have removed it; it simply is not there until someone adds it back.
"Add sewer backup coverage to provide coverage for the direct damage to the unit or contents from sewer backup and sump pump failure."
Source: IRMI Glossary of Insurance and Risk Management Terms, International Risk Management Institute
That means a backed-up line into a finished basement or first-floor unit can be a total loss for whoever bears it, unless an endorsement was purchased ahead of time.
The endorsement usually does more than one job
On an individual HO-6 policy, a sewer backup endorsement typically extends to the loss assessment part of the policy too, the part that reimburses an owner for their share of an HOA-levied special assessment. That matters because the default loss assessment limit on most HO-6 policies is small.
"An HO 6 policy usually comes with only $2,000 of loss assessment coverage."
Source: IRMI Glossary of Insurance and Risk Management Terms, International Risk Management Institute
Two thousand dollars covers almost nothing against a real backup loss spread across a building. The common fix is raising that limit.
"Increase the loss assessment coverage limits to $50,000 or $100,000."
Source: IRMI Glossary of Insurance and Risk Management Terms, International Risk Management Institute
Master policy, HO-6, or both?
Whether your declaration expects the association's master policy or each owner's HO-6 to carry backup coverage, and what dollar limits are actually available, varies by governing document and by carrier. This is the same line-drawing question that runs through master policy versus HO-6 and bare walls versus all-in coverage generally: the master policy and the declaration set the boundary, not a universal insurance rule.
Before your board assumes either policy responds to a backup, ask the broker directly: does the master policy carry the endorsement, does it expect owners to carry it, and what is the actual loss assessment limit on the owner side.
Check yourself
Answer before you read the explanation, recalling it is what makes it stick.
A sewer line backs up into a unit's finished basement. Neither the master policy nor the owner's HO-6 has a backup endorsement. What happens?
An owner's HO-6 policy carries the default loss assessment limit, with no increase requested. About how much does that provide toward an HOA-levied assessment for a backup loss?
Which best describes how a board and its owners should close a sewer backup gap in their insurance?
Sources
- IRMI Glossary of Insurance and Risk Management Terms, International Risk Management Institute
Related elsewhere in the Academy
Insurance
Not sure where your building's coverage line actually falls? Read master policy vs HO-6 next.
Whether the master policy or each owner's HO-6 is expected to carry sewer backup coverage, and the dollar limits actually available, vary by declaration and by carrier.