If you're standing in three inches of water in your basement, you don't care what the source is — you just want it gone. But your insurance company cares enormously. The difference between "water damage" and "flood damage" determines whether your policy pays anything at all.
The legal definitions
Standard homeowners insurance (HO-3 in Maryland and most states) covers "water damage" — water that originates INSIDE the home. Burst pipes, washing machine hose failures, water heater leaks, supply line breaks, and roof leaks from a covered peril like wind. All covered, assuming the loss is sudden and accidental.
"Flood damage" — water that originates OUTSIDE the home and reaches you from the ground level — is explicitly EXCLUDED from every standard HO-3 policy. River overflows, surface water from heavy rain, storm surge, mudflows. Excluded.
The borderline cases
Where it gets confusing: water that comes from a backed-up sewer line. That's neither water damage nor flood damage by default — it's typically covered only if your policy has a specific sewer/drain backup endorsement (sometimes called water backup coverage).
Storm-driven water through a damaged roof? Covered, as long as the roof damage itself was from a covered peril. Storm-driven water rising up from the yard? Flood — not covered.
How to know what you have
- Pull out your homeowners policy declarations page — page 1 lists every coverage.
- Search for "Water Backup" or "Sewer Backup" — if present, you have that endorsement.
- Check separately whether you have a flood insurance policy. Flood policies are sold separately, often through FEMA's NFIP program. Many homeowners don't realize their mortgage didn't require it.
- Call your agent and ask: "Does my policy cover sewer backup? Do I have flood insurance?" Get the answer in writing.
What we see in the field
Catalyst handles both types of losses. The difference at our end is mostly about who pays the invoice — the work itself is similar: extract, contain, dry, document. But for the homeowner, the financial outcome is night-and-day. Make sure you know what you have BEFORE the loss happens.
Standing in water right now?
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