Does my home insurance policy cover floods?
Tens of thousands that suffered catastrophic consequences from Hurricane Sandy, Andrew, Katrina, and more recently Harvey learned the hard way that the answer is no. Many are surprised to learn that their homeowners and renters policies do not cover flooding.
That raises a few questions:
- What does my home insurance cover?
- How do I get flood insurance?
- Do I need it if I don’t live in a flooding zone?
1. What does my homeowners policy cover?
While your homeowners will protect you from water leaks, rain leaks, and broken pipes, if the damage came from a “rising tide of water” or a flood of water, then you are not covered.
2. How do I get flood coverage for my home?
The best place to get flood insurance is through a separate policy from the National Flood Insurance Program, or NFIP (888-379-9531). You do need to go through an agent, however. You can’t buy flood insurance directly from the NFIP.
What do I need to understand about flood insurance?
- The NFIP provides insurance protection for only up to $250,000 for the structure of the home.
- It only provides up to $100,000 for personal possessions
- Your home’s structure will be covered with replacement cost insurance. This means the government will pay to fix and replace the damage to your home minus the deductible.
- On the other hand, the NFIP only provides actual cash value insurance for all of your personal possessions. This means they will pay you the current depreciated value of your belongings minus any deductible. In other words, you will have to pay the difference if you want to replace your items with new ones.
- Finally, be prepared that the NFIP may not provide coverage for furniture and other belongings you keep in the basement. Be sure to keep your valuable belongings upstairs!
- There is a 30 day wait period before coverage takes place, so don’t wait until you receive a hurricane warning! However, if your mortgage lender is requiring you to have flood insurance in relation to your loan, the situation is different and there may not be a waiting period.
3. Do I need flood coverage if I don’t live in a flooding zone?
It makes sense that you would need to invest in flood insurance if you live in a flooding zone or a high-risk area. In fact, 1 in 4 homes in these high-risk areas statistically will make a claim in the next 30 years. So don’t chance it.
But what if you don’t live there? You may be surprised to learn that 20% of all NFIP claims come from moderate to low-risk areas.
You might wonder how you could be flooded if you don’t have a coastal home or don’t live in a hurricane prone area. Hurricanes are not the only source of flooding. Many claims are made due to:
- Melting snow
- Overflowing creeks and ponds
- Water running downhill and flooding your basement
Can you see why it would be advantageous to invest in flood insurance before hurricane season, winter, and the spring thaw? Your InsuranceHub agent is standing by to answer any questions you may have about your homeowners insurance and flooding.
*This article was updated on 09/07/17.