Many people do not realize water backup is not automatically covered on a homeowners policy. Below is an overview of what it covers:
A homeowners policy provides coverage for overflow of water from plumbing, heating, and air conditioning as long as it originates on the premises, such as if your shower drain clogs and causes water to overflow...
But what happens when your back-up originates off premises? Imagine a scenario with heavy rains causing the sewer line to back-up into your bathroom. Coverage is specifically excluded for off premises back-ups unless you have the water back-up endorsement. This endorsement also expands coverage to include back-ups that originate off premises. The endorsement generally includes several limit options ranging from $5,000 up to the full dwelling amount.