Who pays for water damage


For claim settlement after a water damage, four possible parties come directly for parts or all of the damage. In tenancies, a rent reduction can cover additional costs, which, however, are reimbursed in most cases by one of the four parties. Normally, the burden spreads to more than one party.

With or without insurance cover

The four parties that are eligible to cover water damage are three insurance companies and the polluters themselves. Rarely only one party pays, mixed forms are common. Added to that are the levels of damage, which are not always fully covered.

Basically, the payment is determined by the determination of liability for water damage. The nature and cause of the damage determines whether or to what proportion the owner or tenant is liable.

Owners or landlords have statutory mandatory insurance. Individuals can insure themselves, but they do not have to. If they cause water damage, they have to pay for the damage to third parties as well as their own damage.

Reasons for refusal

If insurance is available, the payment, including the amount, depends on the nature of the cause. All insurance excludes any kind of intent that excludes only water-related damage caused by children. If an insurance company does not pay the water damage or only pay partial amounts, there are several reasons:

  • An exclusion clause for gross negligence in the insurance contract
  • A shortfall of the loss amount
  • A cause not covered by the contract

Insurance against water damage

If the liability lies with the owner of the building, the compulsory building insurance for water damage occurs. If the owner fails or the cause of the damage is not covered, his / her property insurance, which is also mandatory, is taken out.

In the case of liability on the part of the user or renter, the third-party liability insurance for third parties such as neighbors is liable for water damage. The household contents insurance is responsible for the damage suffered.

It should be noted that building and liability insurance always take the time value of the damage as recoverable. The contents insurance reimburses, depending on the contract design, the new and replacement value. Frequently, household contents insurance increases payments of other insurances.

Typical example of claim settlement

A water pipe break with tap water damage is present. The owner's building insurance pays for refurbishment, repairs and renovations. In addition, the time value of the damage to the tenant, any additional costs due to uninhabitability such as hotel costs. In the case of a lawful reduction in rent, it reimburses the owner for the lost rental income.

The renter will be reimbursed the difference between the reimbursement of the time value by the building insurance and the replacement value of his household contents insurance.

Tips & Tricks

Pay attention to occasional adjustments of the sum insured in the contracts for all insurance types. For both owners and tenants, the change in living conditions can lead to a higher risk burden in the event of damage. If in doubt, an appraiser helps with the assessment.


Video Board: Who is Responsible for Water Damage in a Condo?