10 Surprising Facts About Flooding and Your Home
We think, for now, that we have narrowly survived a flooding of our home. Located just three miles from the Missouri River, we have witnessed the swelling of her waters and the panic that has gripped our neighbors. Questions and rumors have buzzed for weeks, causing me to have to research quite thoroughly to find the facts about how rising waters could affect my home and three acres of farm land. Thankfully, I believe we will be spared the heartbreak of losing our home, but I’m glad to have learned these ten vital tidbits. (See also: Why You Should Have Renters Insurance)
1. You are likely not covered.
That’s what we learned when we checked our homeowners and rental coverage policies. It turns out that most home insurance coverage plans in the U.S. don’t have to cover flooding, damage from rising waters, or even mold from flood waters that don’t come into contact with your home or contents. To seek protection, you will likely have to purchase a separate policy written specifically for flood coverage.
2. Flood coverage doesn’t have to be expensive.
A common excuse for failing to get coverage in the past has been that it is too pricey for most homeowners. With the offering of the National Flood Insurance Program, however, it is possible to get coverage in certain communities for less than if you bought from a private issuer. (We pay less than $300 a year for our coverage.) It’s important to note that if your community doesn’t participate, you will not be able to receive coverage through the NFIP plan. Contact your insurance agents for details.
3. Flooding can happen to anyone.
One of the reasons we held off on getting flood insurance is that we were not considered to be in a flood plain. In over 100 years, the waters never came near us, and we didn’t see it as necessary. Fast forward to the announcement by the Corps of Engineers that they would be releasing record amounts of water from the dams north of us and combine it with the record rainfall our area received. Now we were faced with an unprecedented possibility of flooding.
In addition, flood maps change every year, making a home that was previously considered “safe” a candidate for being affected by changing water patterns. Floods can be caused by bodies of water that leave their boundaries, heavy rainfall, breaking dams and levees, or weather patterns like hurricanes and tropical storms.
4. Forget about the basement.
Even the most comprehensive coverage will likely not cover anything stored below the main level of your home. This includes basements, crawlspaces, and cellars. If anything is covered, it will be limited. (Remember, many homes contain a large portion of square footage in large “walkout basements.” These areas are subject to limited coverage as well.)
5. Being compensated for 100% of what you lose is unlikely.
The government-issued policies don’t cover everything you lose, and even if private insurance has you covered, there will be a deductible to pay. If you walk away from a flooding situation with the assumption that you will get a big check to replace everything with new items, you will be disappointed, to say the least. As with most policies, you must have proof of the items you lost, and not all items will be able to be repurchased at the replacement value. (Besides, what kind of price can you put on old family photos, jewelry that’s been in the family for generations, or your Star Wars memorabilia?)
6. You will have to wait.
There is a 30-day waiting period for any new policy issued under the plan. If you buy coverage on June 1, for example, your coverage will not start until July 1. It’s important to get coverage immediately if you suspect you will be at risk for flooding in the near future.
7. Once the flooding starts, it’s too late to get coverage.
Additionally, the flooding coverage does not cover “flooding in progress.” What this means is that once a flood event starts, coverage must already be in place. An excerpt taken from a recent FEMA memo (PDF) further clarifies this policy, as it specifically addresses the Missouri River Flood of 2011:
The exclusion is triggered on the date and time of the flooding event...Specifically, FEMA considers it triggered by the earlier of the following situations:
A. The community where the insured building is located first experiences a flood
B. The date and time of an event initiating a flood that causes damage, including but not limited to: a spillway is opened, a levee is breached, water is released from a dam, or water escapes from the banks of a waterway (stream, river, creek, etc.).
In laymen’s terms, if flooding is caused by opening dams (in our case), once those dams are opened, the flooding event has commenced and new policies will not likely be honored. (Flooding events can occur up to six months before actual damage is sustained — just another reason to get coverage BEFORE you need it!) FEMA encourages insurance professionals to go ahead and file claims that may not be covered due to this exclusion, but admits that compensation will be made on a case-by-case basis.
8. Federal disaster assistance won’t cover much.
Yes, you can likely apply for help if your home is damaged or destroyed by flooding, but the money will not be enough to make your home “good as new.” The government estimates that the average bill for residential flood damage is around $48,000 and actual payments from FEMA funds range from $1K to just enough to get your home livable again by legal standards. (It will not cover things like paint, carpet, or the contents of your home.) Homeowners are encouraged to not rely on FEMA help or other government programs to make them whole after flooding, and it is best to anticipate a lengthy waiting period between when you apply for funds and when you actually see them.
9. Accepting assistance changes the game.
If you do apply for and receive grants or loans to put your home back in order, you will be required to carry insurance moving forward — and indefinitely. According to the NFIP website, “you must cover the building for flood insurance for as long as you own it. Should you sell the building, you are required to inform the new owner of the necessity to purchase and maintain flood insurance. Failure to carry flood insurance could result in the denial of future federal disaster assistance.”
10. Mitigation is still the best policy.
Even if you carry a high-value policy with enough coverage to get a new home after a flood, it’s a good practice to try to avoid as much loss as possible. Errors can occur, either when issuing a policy or when it comes time to file a claim. Even if you are confident that your damage will be covered, it’s easier and less costly to everyone to move your valuables out of the flood area and to a safe level of your home or outside storage. (Note: Storage units are a hot commodity during flood events. Please be certain that any unit you rent is out of the flooding danger area, and become familiar with coverage of those items. Many policies don’t cover items stored offsite, and unit owners are not responsible for damage to items stored on their property.)
These facts have been acquired, in part, by information obtained by FloodSmart.gov, the official site of the NFIP — as well as my own experience. Please contact your insurance agent for any specific questions about flooding and your property.