While every insurance policy is different, it's usually safe to assume that a homeowners insurance policy will cover sudden and accidental damage that's the result of a plumbing malfunction, such as a ruptured water heater or a burst pipe. Depending on the insurance company and coverage amounts included in the policy, the entire cost of water cleanup and restoration may be covered, or the insurance provider may only help with some of the repairs, such as damp or moldy drywall or ceilings.
Of course, there are many variables involved, and often, many cases in which insurance companies do not cover water damage. For example, if an appliance has been leaking for some time and the homeowner hasn't taken necessary precautions, insurance companies typically aren't willing to cover the cost of water damage that results from a leak. Additionally, most insurance policies don't automatically include coverage for flood damage; however, flood insurance can often be purchased as a supplement to homeowners policies.