Is homeowners insurance enough, or do you need Flood Insurance too?
While you likely have homeowners insurance, in the case of flood, that is unfortunately not enough. This is because flood damage is not covered by standard homeowners insurance, requiring a separate Flood Insurance Policy.
But what is flood insurance, and what does it cover?
Flood insurance is specialty coverage available through the Federal National Flood Insurance Program (NFIP). This coverage is made available to assist homeowners in the event of flooding from rising bodies of water such as lakes, rivers, streams, and oceans and in cases where existing flood controls such as levies fail. Available flood insurance coverage is managed and administered by the Federal Emergency Management Agency (FEMA).
This coverage is available in two parts:
• A policy that covers property damage (your home) up to a set coverage limit (usually $ 250,000).
• A policy that covers personal property (your furniture and contents) up to a set coverage limit (usually $ 100,000).
Homeowners can purchase one or both of these policies.
Since Flood Insurance is made available in two parts, each policy covers different things. While not an exhaustive list, here are some common things covered by each policy in the event of flood damage:
Home / Property Coverage: This policy covers the physical structure of your home as well as its foundation, plumbing, electrical, central air and heat, cabinets, kitchen appliances such as your fridge and dishwasher, and wall finishes such as drywall, plaster, or paneling.
Contents / Personal Property Coverage: This policy will cover replacement of content such as furniture, clothing, electronics, portable appliances, food, etc.
In the case of a primary residence, Flood Insurance will cover the replacement cost of necessary repairs to the property, while vacation properties and secondary residences are covered based upon the depreciated actual cash value of the repairs necessary. For more, please see Actual Cash Value (ACV) or Replacement Cost – What’s the difference?
Landscaping: As the flood insurance policies are specific to coverage for damage to your home and to your contents, damage to exterior landscaping (including trees and shrubbery), as well as fences and retaining walls, are not covered under your flood insurance policy.
Cash and Some Valuables: In addition, valuables that may have been damaged or lost, such as cash, stock certificates, bearer bonds, etc. are not covered under flood insurance coverage. Some high value items, such as expensive artwork or jewelry may have limited or capped coverage available.
Decks, Patios, and Basements: While considered part of the structure of a home to most of us, for the sake of flood insurance, they are not. There is unfortunately no coverage available under your flood insurance policy for decks and patios that may have been damaged as part of the flood. Basements meanwhile have very limited coverage, the extent of which is determined by whether the floor is below ground level. Though coverage is generally available for your furnace, often homeowners find that most of the repairs necessary in their basements are not covered. This is particularly true of basements that are below ground level. Basements that are above ground level meanwhile, may have limited coverage available for wall or ceiling repairs. Floor coverings such as carpet and vinyl, as well as contents and storage located in the basement are generally also not covered.
Living Expenses: Unfortunately, living expenses such as temporary housing or hotel stays, even though your home may not be livable, are not available under your flood insurance coverage.
Flood insurance policies do include a deductible, which would be the homeowners responsibility. As coverage for your home and your contents are separated into two separate policies, the deductible is applied towards the available coverage for both. The minimum deductible amount is currently $ 1,000, while the maximum is $ 10,000. While a higher deductible will lower your annual premium cost, it will significantly increase your out of pocket cost in the event flooding does occur, so always choose a deductible that you would be able to comfortably afford.
If your home is in a flood zone, near bodies of water such as streams, rivers, lakes, or oceans, or has flooded in the past, flood insurance is highly recommended. Not only does this protect your investment in the event that flooding occurs, but it creates peace of mind that is not available through a standard homeowners insurance policy.
Mortgage holders also require that homes for which they have an interest maintain flood insurance when deemed appropriate or necessary (such as properties near bodies of water or that are located in flood zones).
Flood Insurance is available through most local insurance agents, and can be purchased at the same time you purchase or renew your homeowners insurance policy.
Flood Insurance provided through the National Flood Insurance Program maxes out at $ 250,000 in coverage, which may not be enough should your home suffer flood damage. For homeowners that need (or want) the extra security additional coverage provides, Excess Flood Insurance is available through a number of insurance carriers. Please note that Excess Flood Insurance policies require the homeowner to also have Flood Insurance coverage through the NFIP as it is supplemental.
We hope this helped clear up some of your questions about Flood Insurance! As always, if we can ever be of assistance with Water or Flood Damage, please don’t hesitate to contact your local Disaster Blaster!