Flood Insurance vs. Home Insurance
In a recent report, Clearsurance.com explored the difference between home insurance and flood insurance. The report answers: “If a basement floods, will home insurance cover it?”
Standard home insurance will cover basement flooding from a burst pipe, a flooded bathtub, or another home-based problem. However, if the basement floods because of a natural disaster or weather event, standard home insurance will not provide coverage.
Home Insurance Coverage for Flooding
Standard home insurance can cover flooding damage in many scenarios. Flood damage can range from carpet damage to mold problems to structural issues.
If flooding results from a covered event, home insurance covers repair costs.
In extreme cold weather, pipes can freeze and burst, leading to basement flooding. This type of flooding is typically covered by home insurance.
Sometimes, appliances break down and cause flooding. For example, a dishwasher connection failure could cause flooding. In this situation, if poor maintenance caused the problem, insurance may not cover the damage. However, if the appliance was maintained, home insurance should cover the damage.
If water overflows from a sink or a bathtub because of an accident, the damage should be covered. For example, if a child leaves the bathroom sink running and the water overflows, the resulting damage should be covered.
Insurance That Actually Covers Flooding
If a flash flood happens in a homeowner’s region, standard home insurance will not cover flood damage. If a homeowner has purchased flood insurance, it should cover the damage.
If a homeowner has a sump pump and it fails and the basement floods, neither standard home insurance nor flood insurance will cover the damage. To cover this type of damage, the homeowner would need a water backup rider on their standard home insurance policy.
Homeowners who experience flooding from a storm surge, like the kinds that follow hurricanes, may have coverage through flood insurance. However, in high-risk areas, many insurers now require homes to be elevated to qualify for coverage. Without making those improvements, natural disasters could disqualify homeowners from insurance.
Should all homeowners buy flood insurance?
Homeowners in high-risk areas should buy flood insurance, and lenders may even require it. But what about those in low-risk areas? According to Clearsurance.com, 20% of weather-related flooding events happen in areas that are not considered high risk.
Low-risk homeowners need to compare flood insurance costs with their actual risk. If the risk is higher than average but not considered high risk, flood insurance is more likely to benefit them than someone with almost no risk.
The average monthly cost of flood insurance through top companies is as follows:
- Allstate – $100
- American Family – $100
- Farmers Insurance – $90
- Geico – $90
- Liberty Mutual – $100
- Nationwide – $110
- Progressive – $95
- State Farm – $120
- Travelers – $120
- USAA – $70
Melanie Musson, a nationally recognized home insurance expert with Clearsurance.com, adds, “Individuals in low-risk flood zones can expect to pay less each month, and those in extremely high-risk areas should expect higher monthly premiums.”
Comparing options is one of the best ways for a homeowner to find the best price for their home insurance coverage.
Preventing Floods in Your Home
Even with the highest level of insurance coverage, preventing flooding is better than filing a claim.
Homeowners insurance providers can provide information to help homeowners decide which flood-prevention steps are most effective and which could even earn an insurance discount.
Sometimes, preventing basement flooding can be as simple as creating a runoff channel that directs water away from a house instead of toward it. A smart water switch is another easy prevention to keep water from flooding a basement. Homeowners can find these switches at home improvement stores.
Read Clearsurance.com’s entire report here: Does home insurance cover flooded basements?