Your home is more than a structure. It’s where lives are lived and memories are made. Homeowners’ insurance can help protect your house from perils like theft or fire, but what about flood water that enters your home? The answer might surprise you.
Do I need flood insurance?
Flood insurance isn’t a niche product for the select few; it’s a valuable safeguard for homeowners, renters and business owners across the country. Flood coverage is often mandatory for property owners with government-backed mortgages in high-risk areas, but even if it’s not a requirement, it can be a wise investment. After all, according to the Federal Emergency Management Agency (FEMA), all 50 states have experienced floods or flash floods in the past five years.
Are floods covered by homeowners’ insurance?
Most home insurance policies exclude floods, meaning that if your home is damaged due to flooding, you’ll be left with the entire bill for any repairs, replacements and, if your home is uninhabitable due to damage, hotel stays. This could mean exorbitant costs just to turn your house back into your home – costs that could far eclipse those of flood insurance premiums.
Water vs. Flood Damage
While flood insurance is an important part of being prepared for the worst, it’s often misunderstood and overlooked by homeowners, who might assume that floods are included in their homeowners’ policy as a kind of water damage. And, while the resulting damage can be the same, water damage and flood damage may be viewed (and covered) very differently by your insurance carrier. Here are a few key differences:
- Flood Damage: FEMA defines a flood as an excess of water on land that is normally dry, affecting two or more acres of land or two or more properties. Private flood policies may have a broader definition of what constitutes a flood. Potential causes of flood damage include an overflow of tidal or inland waters, unusual and rapid accumulation or runoff of surface waters, mudflow or a rapidly moving mass of soil due to rain and collapse of land along the shore of a lake or similar body of water.
- Water Damage: Water damage can be caused by various factors and usually does not affect neighboring properties. Potential causes of water damage include plumbing issues, leaky faucets or pipes, sudden and accidental discharge of water or steam on the premises and leaks from air conditioning units or appliances.
What is flood insurance?
Flood insurance is a form of coverage that is designed to cover both your property’s structure and the items within it. The National Flood Insurance Program (NFIP) delineates two types of coverage: building coverage, which protects your property’s physical integrity, and contents, which protects your personal effects. Private flood insurance may also help cover temporary living expenses. Your insurance broker can help determine the best kind of flood insurance coverage for your needs.
Costs of Flood Insurance
The costs of flood insurance can be highly variable, but some key factors carriers take into account when determining flood premiums include:
- Location: Properties in high-risk areas often have higher premiums.
- Flooding History: Homes with a history of flood-related damage will likely cause higher premiums.
- Elevation: Homes at a higher elevation may be considered to be a lower flood risk, which could reduce flood insurance costs.
- Deductible: The amount you choose for your deductible can impact your premium, with higher deductibles typically lowering facing lower premiums but resulting in higher out of pocket costs in the case of a claim.
- Construction: The type of construction and materials used in your home can affect insurance rates.
- Coverage Limits: The amount of coverage you choose will also affect your premium, with more robust coverage incurring higher premium costs.
What’s Not Covered by Flood Insurance
While flood insurance can provide vital coverage outside of your homeowners’ policy, it typically does not cover certain items or situations. Some common exclusions in flood insurance policies include:
- Outdoor decks, patios and fences
- Swimming pools and hot tubs
- Personal property kept in basements
- High-value items, such as heirlooms or jewelry
- Cars and vehicles
- Currency and other valuable papers
- Damage caused by mold and mildew, unless directly linked to the flood event itself
- Property outside of the insured building
Common Myths About Flood Insurance
When it comes to flood coverage for your home, there can be many misconceptions. Let’s break down a few of these myths to reveal the facts about flood insurance.
Myth: I don’t need flood insurance because I don’t live in a flood zone.
Fact: According to FEMA, in the past five years, floods have affected all 50 states, and nearly 25% of flood insurance claims come from homeowners in low-to-moderate flood risk zones.
Myth: I can’t get flood insurance because my home is in a high flood risk area.
Fact: You can buy flood insurance no matter where you live, whether that’s through the NFIP or a private insurance carrier. Talk to your insurance broker to go over your options for flood coverage.
Myth: My home has flooded before, so I can’t get flood insurance.
Fact: You can still purchase flood insurance after your home, apartment or business has been flooded.
Myth: I’m covered by my homeowners’ policy.
Fact: While you can depend on your home insurance to cover many types of water damage, most standard homeowners’ policies do not cover damage caused by flooding.
Myth: Flooding isn’t that common, so I don’t need coverage.
Fact: Flooding is the most common and costly natural disaster in the United States, occurring more often than hurricanes, tornadoes or earthquakes. And, according to FEMA, just one inch of flooding could cause tens of thousands of dollars in damage to your home.
Is your home protected?
Protecting your home against flood damage can feel confusing, and the abundance of information available can only make things worse. At Higginbotham, helping guide you through some of life’s biggest decisions is what we do. Our personal insurance specialists can help you secure homeowners’ and flood insurance coverage that’s tailored to your needs. Get in touch with a member of our team and discover how Higginbotham can help protect what matters most to you.
