Flood Insurance Isn’t Just for Flood Zones — Make Sure You’re Prepared No Matter Where You Live
Flood insurance isn’t typically something someone in Ohio thinks too much about. Maybe you believe you’re not at high risk because you don’t live by a body of water or that your current homeowners or rental policies have you covered.
But despite what many people think, flood damage is not covered by standard homeowners and renters insurance policies. According to the National Flood Insurance Program (NFIP), more than 20 percent of all flood losses come from low-to-moderate risk zones. Despite the lower risk, the impact of a flood remains just as strong with the average claim being upward of $27,000.
That means if you don’t have separate flood insurance, you could be in financial trouble if the waters start to rise.
Why Do I Need Flood Insurance in Central Ohio?
We get it — we aren’t exactly a coastal area. Hurricanes aren’t a typical threat here in Central Ohio. We don’t have many large bodies of water around us. So is it even worth it to pay for flood insurance?
Let’s take a step back and consider how a property can flood. Something as simple as a poor drainage system, rapid accumulation of rainfall, snowmelt, and broken water mains can all result in flooding that can cause extensive (and expensive) damage. Even a home up on a hillside can get hit with mudflow (which, by the way, is covered under the Standard Flood Insurance Policy).
You may actually be required to have flood insurance by your mortgage lender if you’re in a high-risk area or if your lender mandates it. Most inland homeowners do not have flood insurance, but affordable coverage is available.
How Do I Get Flood Insurance?
The National Flood Insurance Program (NFIP) is a program that allows homeowners, renters, and business owners to purchase federally-backed flood insurance in any community that participates in the program. Thankfully, many counties in Ohio participate in the National Flood Insurance Program. This means you likely have affordable, reliable options for purchasing flood insurance.
You can also work with your insurance agent to add personal flood insurance to your homeowners or renters policy. Even some private insurance companies have specific personal flood insurance programs designed for residents in low-risk areas where floods are becoming more frequent.
Your insurance agent can advise whether your community takes part in NFIP, and/or whether personal flood coverage added to your existing policies would be your best option. But it’s important to note that there is a 30-day waiting period for flood insurance to go into effect, so don’t wait until it’s too late.
What Does Flood Insurance Cover?
There are two main types of flood coverage: structural and contents. They are what their names imply — structural coverage covers things like the building, the foundation, electrical and plumbing, built-in appliances, permanently-installed carpeting, and other mainstays, typically up to $250,000. Contents coverage includes personal property like clothes, curtains, portable appliances, and electronic equipment, typically up to $100,000.
Anything that probably should be in a safe won’t be covered. That includes things like cash, precious metals, stock certificates, stamps, and bearer bonds. Also, backed-up sewers or drains and overflowing sump pumps are not covered under flood insurance, but typically can be added under separate coverage in a homeowners policy.
Basements are a tricky area. NFIP offers coverage for structural elements and essential equipment typically found in basements, but a lot of things like finished walls and floors, furniture and other personal property aren’t covered unless you add or expand on policies. Your insurance agent is a great resource for identifying the right mix of policies to cover all structural and personal contents both above and below ground in case of water damage.
Perhaps the biggest misconception is that floods and water damage are covered under homeowners and rental policies. They’re not, as we’ve discussed. But there are several other things that people often get wrong about flood insurance.
“I’m inland, in a low-risk area. I don’t need flood insurance.”
Most inland homeowners are not insured, because they don’t think they’re at risk. But flood damage can come from anywhere that experiences rain, which is just about anywhere in the United States. Just one inch of water can cost $25,000 in damage, so it can add up very quickly. And the truth is, you are in a flood zone.
“Isn’t water damage and flood damage the same thing?”
Water damage and flood damage are covered by two different insurance policies. Water damage is considered anything that’s damaged from water before it comes in contact with the ground, like a burst pipe destroying your walls, and it’s often covered under homeowners policies.
Likewise, flood damage from wind-driven rain is not covered under flood insurance. For example, if wind tears a roof off a house and rain pours in and damages the walls and floors, it’s considered to be windstorm-related and therefore not covered by flood insurance.
Flood damage, on the other hand, is caused from water coming from the ground up. To qualify as flood damage, at least two acres of normally-dry land must be affected or two or more properties must have water damage, including the property making the claim. The source of the water has to be from overflowing inland or tidal waters, unusual accumulation or runoff of surface waters or mudflow. Properties that have damage from land collapsing or sinking due to water above anticipated cyclical levels are also considered eligible for flood damage coverage.
“I’ve got flood insurance, so everything is covered now.”
Well, not exactly. Flood insurance doesn’t cover things like personal property outside the home (patio furniture, grills, etc.), decks and fences, landscaping, sump pump discharge, or overflow or backup of sewers or drains (unless caused by flood), automobiles or recreational vehicles, outdoor hot tubs, or swimming pools. Flooded vehicles are typically covered under auto insurance policies.
The best way to protect all of your belongings from water damage of any kind is to talk with an experienced agent. They will be able to help you assess your risk and help you decide on the right policies and coverage options.
To find out more about flood insurance, contact the independent advisors at Hill & Hamilton Insurance. We’re here to answer your questions.