Water damage consistently ranks among the most common causes of home insurance claims. Anything from coastal flooding to corroded pipes can leave water in places it doesn’t belong, and the longer that water lingers, the costlier the damage will be to fix.

Homeowners insurance covers many types of water damage. However, for your home insurance to kick in, the damage must be caused by a sudden and accidental issue inside your home, such as a burst pipe. Flooding and gradual damage are typically excluded. In either case, it’s important to understand the signs and sources of water damage before it affects your home. We’ll cover the latest water damage statistics, plus how to identify and prevent this costly issue.

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Number of Annual Water Damage Claims

Homeowners are highly likely to experience water damage at some point in their lives. According to the Insurance Information Institute (III), water damage and freezing accounted for 27.6% of claims in 2022, up from 2021 by 4%.

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Flood Damage Statistics

Just 1 inch of water in the typical home can cause up to $25,000 worth of damage, according to FEMA and the National Flood Insurance Program. Nationally, it costs Americans over $180 billion in damages annually. Just this year Hurricane Helene caused catastrophic damage in the southeast, with initial damage reports at $53 billion. 

Note that not all homeowners insurance policies cover flood damage. III statistics indicate that 22% of homeowners reported that they are at risk of flood in 2023.

FloodDefenders, a nonpartisan nonprofit organization that advocates for local flood prevention measures, has compiled statistics on the prevalence and cost of flooding in the United States.

• 99% of U.S. counties have been impacted by a flood event between 1996 and 2019. 
• Flooding has cost taxpayers 1 trillion dollars since 1980 and is responsible for two-thirds of the costs of natural disaster damage. 
• There has been a 70% increase in heavy downpours each year in the Eastern United States. 

FEMA flood plains are out of date, with 6 million Americans unknowingly in a flood plain.

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Types of Water Damage

Water damage falls into one of three categories, depending on the cause and severity of the issue:

Clean water

Damage that results from clean water falls into Category 1. For the purpose of water damage classification, water is considered clean if it is free of toxins and sewage. A leak in a water supply line or water damage resulting from melted snow would fall into this category. Most items affected by a Category 1 incident can be easily dried out without any lasting damage.

Gray water

Damage that results from “gray” or “dirty“ water falls into Category 2. Water is considered gray if it has been exposed to waste or chemical contaminants. Examples are bathwater and water from your dishwasher. Although these contaminants may or may not be directly harmful to humans, gray water damage can cause issues later. Items affected by a Category 2 incident need to be thoroughly disinfected or replaced entirely.

Black water

Damage that results from potentially toxic water falls into Category 3. If there is any chance that water might contain pathogens or toxins, it is considered black water. Examples include flood water, sewage, seawater, and even groundwater. A Category 3 incident requires swift and serious attention to mitigate health risks and permanent damage.

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What Does Water Damage Look Like?

Water damage is often immediately evident. A flash flood or overflowing toilet, for instance, is hard to miss. However, smaller issues can go undetected and cause damage over several weeks or months. Be on the lookout for warning signs that indicate a hidden problem. Water damage can look like any of the following:

• Water stains: Even clean water can cause stains as it soaks through your walls, ceiling, or floor. Water stains typically appear as areas of beige, yellow, or brownish discoloration.
• Humidity: Some of the water leaking into your home will naturally be absorbed into the air, causing increased humidity. You might also notice more condensation or mugginess.
• Mold or mildew: If the issue persists long enough, mold or mildew can begin to grow in affected areas. According to the Federal Emergency Management Agency (FEMA), mold can begin growing on a damp surface within 24–48 hours.
• Dripping: In the case of a hidden leak, you may hear a dripping sound with no visible source. A large or prolonged leak could also result in water dripping through your ceiling or light fixtures.
• Peeling paint: Excess humidity or water soaking through your walls can cause paint to peel or bubble. You might notice similar issues with wallpaper.
• Hairline cracks: Thin cracks in your home’s walls, ceiling, or foundation may be caused by harmless temperature fluctuations or the house settling. However, they can sometimes be a sign of serious water damage.

If your home has a hidden leak, you might also notice a higher-than-usual water bill or increased water usage. According to the Environmental Protection Agency (EPA), the average home leaks around 10,000 gallons of water every year. Even small leaks can waste huge amounts of water—10% of households waste more than 90 gallons of water daily through minor leaks and drips. 

Your utility company might even reach out to suggest that you look for a leaky pipe, dripping faucet, or perpetually running toilet if their records show constant water usage at your home. Fixing household water leaks and updating plumbing can save homeowners about 10% on their water bills. A home warranty with plumbing coverage will also help you save.

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Top Causes of Water Damage

Although flooding and storm damage are the most frightening causes of water damage, they are not the most common. The vast majority of water damage is more subtle, with a source closer to home. Here are a few common causes of water damage:

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How To Prevent Water Damage

Water damage can be expensive to repair, but early detection and prevention measures can make a huge difference. Here are a few things you can do to prevent water damage.

• Check hoses, pipes, and faucets regularly. Inspect the visible parts of your plumbing system for drips and leaks. Rust-colored water, small puddles of water, extra moisture, and noisy pipes could all indicate an issue.
• Pay attention to toilets, sinks, and tubs. If you notice any issues with your toilet, call a plumber or run some DIY diagnostics. For instance, you can drop a little food coloring into your toilet tank and wait 15 minutes to see if any colored water makes its way into the bowl without you flushing it. If it does, your toilet may have a leak. You can also monitor your sinks, tubs, and showers for signs of a leak.
• Install a water-leak detector. Use a water-leak alarm to quickly catch leaks and an automatic shut-off system to minimize the damage.
• Monitor your water bill. A major change in your water bill could indicate an issue with your home’s plumbing or supply line. To confirm the presence of a leak, go two hours without using any water and read your water meter before and after this time period. If the number changes, you likely have a leak.
• Schedule regular water heater inspections. Have a plumber inspect your water heater regularly. It’s also wise to have an HVAC company inspect your air conditioner every spring. Identifying issues early can prevent the expense of replacing your water heater.
• Watch for signs of water damage. Keep an eye out for any signs of water damage, including those listed above.
• Protect pipes from freezing. Make sure the temperature inside your home stays above 50 degrees Fahrenheit (10 degrees Celsius), even when you are not home. This will help keep indoor pipes from freezing during cold weather. Wrap exposed pipes, such as those in your crawlspace or unfinished basement, with snap-on insulation. 
• Fix issues quickly. If your home does develop a leak or any issue that could cause water damage, address the problem quickly. Cut off the water and call a plumber as soon as possible. Consider getting a home warranty with roof coverage to help fix any issues.
• Clean your gutters regularly. Many experts recommend cleaning your gutters at least twice per year. You might also install gutter guards to keep out debris. Clogged gutters cannot drain properly. As the water backs up, it can seep under your roof and into your home or pool around your foundation and leak into your basement.

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Our Conclusion

A single incident of water damage can cause homeowners or insurance companies thousands of dollars. Of the 5.8% of insured homes that filed a claim from 2018 to 2022, an average of about 25% of those experienced a loss related to water damage or freezing. According to III statistics, only damage from wind and hail is more likely.

Fortunately, homeowners can take several steps to prevent or mitigate water damage. We recommend learning what water damage looks like and how to turn off your water in an emergency. Then, invest in regular home maintenance, including gutter cleaning and regular HVAC inspections. Pay attention to water damage warning signs and address small issues promptly before they grow into more expensive problems.

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FAQ About Water Damage Statistics

What is the biggest concern with water damage?

The biggest concerns about water damage range from structural damage to potential health risks. Flooding and water damage can weaken load-bearing materials, including your home’s structural supports. Water damage also facilitates the growth of mold and mildew, and standing water is a breeding ground for bacteria and viruses.

How much water causes damage?

Even small amounts of water can cause damage. Water absorbs into floors, walls, furnishings, and more. If you leave it too long, your home insurance company may not cover the cost of damages.

What is water damage restoration? 

Water damage restoration is repairing water damage by removing water, dehumidifying, cleaning, and restoring the property to its original condition. It can take a few weeks depending on the severity of the damage. 

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