After a flood or other substantial water event, flood insurance policy holders are often surprised to learn what is covered by their flood policy – and more surprisingly, what is NOT covered under their flood insurance policy. As I have written about before, flood insurance is totally separate from homeowners insurance, and both provide separate coverage for different types of loss. Specifically, homeowners insurance does not cover water damage from flood.
In order to qualify for coverage under your flood insurance policy, there must have been a “flood” in your area. A “flood” condition occurs when water covers at least two acres of land that is normally dry, or if the water condition has damaged two or more properties in your area. Additionally, this water has to come from either (1) overflowing or inland tidal waters, (2) unusual, rapid accumulation or runoff of surface waters from any source, or (3) mud flow (defined as mud that is carried by a flow of water, thereby creating a river of mud). Depending on the circumstances, there may also be coverage for waterfront land that collapses or sinks as the result of water that is above anticipated cyclical levels. Importantly, damage caused by water that overflows out of sinks, toilets, sewers, or similar sources does not qualify for flood insurance coverage, but should instead be covered by your homeowners insurance policy.
The maximum available coverage limit for flood insurance is currently $250,000.00 for your principal dwelling and $100,000.00 for personal property. Unlike the coverage available under your homeowner’s insurance policy, the building coverage provided under your flood insurance policy is very specific as to what it covers – and what it doesn’t cover. In order to avoid a lot of heartache later, you may want to review your policy before a loss in order to better understand the limited coverage that flood insurance actually provides. You can click HERE to see a listing by FEMA as to the specific items that are currently covered under the standard National Flood Insurance Program policy.
The coverage for personal property loss under flood insurance is even more limited – especially for personal items in a basement. In general, the only personal property covered below the “lowest elevated floor” would be your laundry equipment, freezer (but not refrigerator!), and portable air conditioner. There is no coverage for any flooring, drywall, window treatments, or any other type of personal property (furniture, electronics, etc.) stored in your basement or below the lowest elevated floor. As an additional jab, your flood insurance policy only covers your personal property on an “actual cash value basis”, as opposed to what you actually paid for the items or what it would take to replace them.
There is no flood insurance coverage for any loss of use, additional living expenses, or temporary housing while your home is being repaired. There is also no coverage for any loss of business income.
As you can imagine, the flood insurance policies issued by the National Flood Insurance Program are not overly consumer friendly and really only provide the most basic of coverage. Should you ever have questions regarding the coverage available under your insurance policy or the manner by which to submit a claim, please feel free to contact our office and we will do our best to answer any questions you may have.