Floods cause a massive amount of damage each year to property owners throughout the United States. Through the National Flood Insurance Program (NFIP) – established pursuant to federal legislation in 1968 – certain property owns can purchase flood insurance to protect their property against the risk of flood. While some people may be able to secure flood insurance through private insurers, most homeowners policies do not cover flooding. In addition, most forms of federal disaster assistance are only available when the President declares a major disaster.
Flood insurance is not required for property owners whose property is outside a designated high-risk area. Regardless, many properties remain vulnerable to flood damage in the event of heavy rains, even those outside of specified high-risk areas. In fact, people outside of such high-risk areas make over 20 percent of the claims paid by NFIP and receive approximately one-third of disaster assistance provided for flooding. If your property is not located in a high-risk area, talk to your insurance agent to determine whether your home or commercial building is eligible for flood coverage.
Most flood policies cover direct physical damage to buildings or personal property as a result of flood. The extent and amount of your damages may be up for debate as to what caused the damage. The answers to these questions may determine whether the damages are covered under a standard homeowners policy or flood policy. The determination regarding causation (i.e., flood v. wind) can have significant consequences on what you’re entitled to recover from insurance. For example, most homeowners policies provided loss of use coverage which will pay for you to live at another home while your claim is being adjuster and while the repairs are made. Flood policies don’t typically provide loss of use coverage.
In general, flood insurance covers loss to the following:
Building Property coverage – flood coverage protects the insured’s building and foundation as well as the home or building’s various components (e.g., electrical and plumbing systems, HVAC equipment, water heaters, built-in appliances, permanently installed carpeting and paneling, etc.).
Contents coverage – flood coverage generally protects against loss to personal belongings, including clothing, furniture, electronics, curtains, portable HVAC systems, washers and dryers, carpets not included in building coverage, certain valuable items, etc.
Most flood insurance policies do NOT insure loss for Building Property or Contents coverage for the following items:
Some of the coverages identified below may be assessed by various experts, including engineers, environmental experts such as certified industrial hygienists, roofers, general contractors, among other qualified professionals. If you have questions or concerns about the individuals hired by the insurance company, you may need to retain your own experts.
As always, it is important to review your individual policy to determine the specific insurance coverage provided by your insurance policy. If you have any questions concerning your flood insurance coverage, please call the attorneys at Grisham & Kendall, PLLC.