Water Co-op Insurance: Your Flood Coverage at a Glance

Understanding what your insurance covers, and what it does not, is important for every water co‑op. When something goes wrong, the difference between a covered loss and an uncovered issue can have major financial impacts. Clear information helps co‑ops make informed decisions, plan for risks and respond confidently during emergencies or system failures.

RMA is the Water Federation’s insurance provider. This policy protects your co‑op when flooding, sewer back up or operational issues cause damage or disruption. The summary below explains how coverage works and where exclusions apply.

Flood Coverage

RMA uses one broad definition of flood. Any situation where water temporarily covers land or structures that are normally dry is considered a flood. This includes:

• Rapid buildup or runoff of surface water.
• Waves, tides, storm surges or overflow from any natural or man‑made body of water.
• Mudflows or mudslides caused by water.
• Water backing up from a sewer, drain, sump or septic tank due to flooding.
• Flood claims carry a $250,000 deductible.

What Flood Does Not Include

• Water escaping from an elevated firefighting water tank on the co‑op’s property.
• There is also an exclusion for seepage. Slow water entry through basement walls, foundations, floors or sidewalks is not covered unless it was caused by another insured event. 
• RMA has confirmed there are no additional coverage options for seepage. In most cases, cracks or deterioration in walls or foundations are considered maintenance issues.

Sewer Back‑Up

Sewer back‑up is covered more broadly. Each claim is reviewed individually, and coverage depends on how the back‑up occurred and what caused the damage.

Operational and Compliance Protection

The policy also supports co‑ops when operational issues lead to fines, penalties or system impacts. Coverage applies when:

• A reporting error or missed environmental standard results in fines or penalties.
• A contractor’s advice or operational adjustment causes a system error, water shortage or damage to co‑op infrastructure.

A clear understanding of your insurance will help co‑ops prepare for unexpected events and manage risks with confidence. Knowing where coverage applies, and where it does not, supports better planning, stronger maintenance practices and faster decision making when issues arise.

If you have questions about your policy or need help interpreting a specific situation, the Water Federation team is here to support you.