1. Forms
2. HO
3. HO-24-73

Form HO 24 73: Water Back Up And Sump Discharge Or Overflow

1. What the form is

The Water Back Up And Sump Discharge Or Overflow endorsement, as described by its title and summary, is designed to provide crucial financial protection for homeowners. Its primary purpose is to cover direct physical loss to insured property caused by water that backs up through sewers or drains, or water that overflows or is discharged from a sump, sump pump, or similar system. Standard homeowners policies, such as the HO 00 03 and HO 00 05, typically exclude this type of water damage, making this endorsement essential for adding back this specific peril. The coverage generally applies when the loss is not due to the negligence of an insured. This endorsement can cover damage to the dwelling structure and personal property, and some policies may also include additional living expenses if the home becomes temporarily uninhabitable due to a covered loss.

2. Classes of business it applies to

This endorsement is specifically for the Homeowners line of business. It is applicable to virtually any homeowner or tenant whose dwelling could be exposed to losses from water backing up from sewers or drains, or from sump pump system overflows or discharges. Real-world scenarios where this coverage is particularly relevant include:

• Homes with basements or crawl spaces that rely on sump pumps to manage groundwater.
• Properties located in areas with aging municipal sewer infrastructure, which can be prone to backups.
• Houses in neighborhoods where heavy rainfall can overwhelm storm drains and sanitary sewers, leading to backflows.
• Older homes whose plumbing systems might be more vulnerable to backups, even if the primary failure is external to the insured's own pipes (e.g., a city sewer main blockage).

3. Special considerations

There are several important considerations when utilizing this endorsement:

• Coverage Limits: This endorsement typically provides a specific, often lower, limit of liability for water backup losses (e.g., $5,000, $10,000, or $25,000). This limit is distinct from and does not increase the overall policy limits for Dwelling (Coverage A), Other Structures (Coverage B), Personal Property (Coverage C), or Loss of Use (Coverage D).
• Excluded Property/Losses:
  • The endorsement usually does not cover the cost to repair or replace the failed sump pump, sewer pipe, or drain itself; it covers the ensuing water damage. For instance, if a sump pump motor burns out, the cost of the new pump isn't covered, but the damage from the water that subsequently overflows would be, up to the endorsement limit.
  • It is not a substitute for flood insurance, which covers damage from rising surface waters.
  • Damage resulting from an insured's negligence (e.g., knowingly ignoring a severely clogged drain that leads to a backup) may be excluded, aligning with the summary's point that the loss is "not caused by the negligence of an insured."
• Optional Coverage: This is an optional add-on to the homeowners policy, and an additional premium is required.
• Loss Prevention: While not always a strict requirement, the installation and maintenance of backwater valves or alarm systems for sump pumps can be highly recommended and may be considered by underwriters.
• Real-world example: If a town's sewer system experiences a blockage and sewage backs up into a homeowner's basement, causing $12,000 in damage to finished walls, flooring, and stored belongings, an HO 24 73 endorsement with a $10,000 limit would pay up to $10,000 for the cleanup and repairs, less any applicable deductible. The remaining $2,000