“Water, water, everywhere….” Coleridge

It certainly made Noah’s job hard, but it makes our jobs even harder. Floods cause overwhelming damage, destroy property and ruin lives. In the professional opinion of Frees Insurance, flood insurance does not do much to help the situation. If you have ever watched television, read a newspaper, or read Reader’s Digest, you have probably seen the advertisements/notices that advise that your home, or property insurance, does NOT cover flood damage. The recent impact of Super Storm Sandy has brought this limitation front and center. Whether you have flood insurance or not, there is NO coverage under your home, or property policy, for surface water OF ANY SORT.

You would think that buying Flood Insurance would address the coverage exclusion under the home policy. It does NOT. A flood is defined as the overflow of a body of water. That probably makes sense. It goes on to describe a flood as the collection of water that affects you and an adjacent property. Who dreams this stuff up? If you live at the beach and the ocean or bay comes to “visit”, this is a flood. If you live on a street where the storm drain gets clogged and water backs up into your house, there is coverage, right? Maybe! If the storm drain was on your property ONLY and the accumulation didn’t affect your neighbors, this isn’t a flood. If there is a large snow accumulation, and then it rains hard, and the snow channels the rain into your window well and then into your basement, it’s a flood, right? No! There is no adjacent property involved.

Flood insurance does not cover the following:

Water that backs-up through a sewer or drain.

Water that is not carried away by a sump pump.

Water BELOW the surface of the ground.

Once FEMA, who oversees the National Flood Insurance program, decides that what you have is a flood, the policy is VERY limited on what it will pay. Unlike your home coverage, there isn’t replacement cost coverage. There isn’t automatic coverage for your contents. There is a separate building and contents deductible. The preferred flood coverage can be as little as about $500 a year, but a preferred policy means that you aren’t in a flood zone. Insurance for a property in a flood zone can be three to five times the annual cost of your regular home or property policy.

Water continues to be our greatest challenge when trying to help people understand the coverage limitations under any policy. 30% of all flood losses occur where homes and buildings are not even in an expected flood zone.  Questions about whether you should have coverage, even if you aren’t near a river, creek, or ocean? Call us to review the coverage or answer any questions you may have.