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  • Writer's picturePerceptive Things Team

The Average Cost of Water Damage Insurance Claims for Multi-Family Buildings

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Whether caused by flooding, broken pipes, molds, leaking roofs, or severe weather, water damage is a common multi-family building insurance claim.

Multi-family building owners and their teams often underestimate the average cost of water damage insurance claims for their residential property.

In this article, we will share why the average cost of water damage insurance claims is often higher than you would initially think. We will also share tips on how to prevent water damage so you will not have to file an insurance claim in the first place.

Please be aware that many of the statistics cited in this article are based on common household leaks. As you can imagine, these numbers can climb in multi-family spaces due to the potential impact on other tenants!

How much does a water damage insurance claim for a multi-family building cost?

According to the most recent statistics, the average water damage insurance claim for a home is $11,098. You can imagine how that figure might be even more for a multi-family building, which could contain several connected residences.

Remember that a multi-family building insurance policy may not even cover some types of water damage claims.

Here are the most common water damage claims for multi-family buildings filed every year:

Wind-driven rain

If a weather system results in heavy rain and wind that damages the roof of your multi-family building, your insurance policy may cover the resulting water leak damages.

Besides, if wind-driven rain hurls debris through your building windows and doors, making rainwater seep in and ruin the flooring and walls, that water damage will also be covered and claimed.

Burst pipes

If water pools or leaks after the plumbing pipe bursts, the multi-family building insurer will pay for repairs and restorations, such as fixing walls and floors.

You can also make insurance claims for damaged belongings, such as interior decorations and furniture that were damaged.

Average individual insurance claims for water damage in homes due to burst pipes can range from $10,000 to $20,000. In 2021, The Wall Street Journal reported that burst pipes from winter storms resulted in homeowners and business owners asking their insurers for an estimated $18 billion to cover the damages.


If your multi-family building insurance policy covers water damage that causes mold, it can sometimes also cover mold removal.

Mildew and mold can develop as fast as within 24 to 48 hours after water damage occurs. That is why the insurer may cover mold removal if the plumbing pipes burst and mold starts to develop in your building’s basement. Most insurance companies limit mold claims in homes to $1,000-$10,000.

Of course, the insurer is unlikely to cover mold removal if the damage results from outstanding building maintenance issues and owner neglect.

Appliance malfunctions

When a washing machine or water heater hose breaks, it can cause water leak damage to your flooring or drywall. So, your multi-family building insurance policy may cover the replacement and repair costs of damaged belongings.

The policy may not cover the replacement or repair of the malfunctioned or broken appliance.

Ice dams

An ice dam develops when ice accumulates on the roof of your multi-family building and prevents rainwater from running off properly. When the rainwater pools on the multi-family building roof, it can cause roof leaks and damage to shingles.

Insurance claims due to water damage caused by ice dams are around $11,100 per homeowner. A multi-family home, which might have a much larger roof, could see more extensive damage, which would naturally drive up the claim amount.

Types of water damage NOT covered by multi-family building insurance

The most common multi-family insurance claims exclusions include water damage from exterior flooding.

Below we will share the various water damage situations that are not usually covered in multi-family building insurance claims:


The coverage for flood damage is not included in a typical multi-family building insurance claim or cover. Instead, if you live in high-risk flooding areas, you will be required to buy a separate flood insurance policy.

You can make claims through private insurance companies or the National Flood Insurance Program (NFIP). The average flood claim cost from the NFIP is $52,000.

You might consider purchasing flood insurance coverage even if you live in areas that don’t flood often. Even an inch of floodwater can cause as much as $25,000 worth of water damage!

FEMA reports that 40% of NFIP claims are filed by multi-family building owners who do not even live in high-risk flooding areas.

Water and sewer backups

Most standard multi-family insurance coverages do not automatically include claims for water damage caused by sewer backups or sump pump failures.

You can consider buying a separate water backup insurance policy as an additional coverage endorsement to cover water damages if sewer backups or sump pump failures cause your multi-family building to flood.


Another common situation where an insurance company may not cover water damage is one in which a property is not being properly maintained.

From delays in addressing a leaking roof to ignoring the initial signs of mold, negligence is a common culprit for denied claims. Your insurer may not provide coverage in this instance if they discover a lack of maintenance on your part contributed to the water leak damage.

Preventing water damage in multi-family buildings

One of the ideal methods for preventing water damage in your multi-family building is to install water leak sensors in the right places inside the building. These sensors will alert you through an email, text, or phone call whenever they detect moisture or a water leak, allowing you to manage the situation promptly.

By preventing major water damage, you will save yourself from having to file extensive water damage insurance claims for your multi-family building.

We encourage you to spend some time researching the best smart sensors for multi-family buildings. At Perceptive Things®, we have different sensors that can help protect your multi-family building by detecting moisture and water leaks before they cause extensive damage.

Droplet Solo™ water leak sensor

The Droplet Solo™ is an IP-67-rated water leak sensor. It has a built-in audible buzzer alarm to notify you immediately if there is a water leak.

This water leak sensor has an unobtrusive design, allowing for seamless integration into any space in your multi-family building.

Its durable CR24505 battery provides worry-free water leak protection for up to four to five years!

Droplet Duo™ water leak sensor

This dual-probe water leak sensor has separate wireless alert systems for each probe. It is like having 2 sensors in one!

Droplet Duo™ comes pre-configured for your multi-family building, making it easy to mount and install. Its 3M adhesive pads ensure that the sensor is firmly secured to surfaces without fail!

Droplet Pro™ water leak sensor

This IP-67-rated, industrial-grade water sensor is easy to mount on beams and other iron surfaces, thanks to the internal magnets on the sensor’s body.

Droplet Pro™ includes a 3-meter rope, allowing you to detect water leaks along its entire length. Its long-lasting battery guarantees you 24/7 water leak detection for up to four to five years.

Final Thoughts on the Cost of Water Damage

Water damage insurance claims are common among multi-family building owners. While the average water damage insurance claim for multi-family buildings is $11,098 per claim, you will be required to pay a high insurance fee.

Installing water leak sensors at the right places inside your multi-family building can help prevent water damage and unnecessary insurance fees.

We hope this article has helped you understand the average cost of water damage insurance for multi-family buildings. Feel free to contact our team at if you have unanswered questions.

Have you ever filed a multi-family building water damage insurance claim? How much did you claim? We would love to know about it via the comments section!

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