Most homeowners know that water is a primary source of damage to houses and is probably only second to fire as a hazard. It’s also one of the main covered perils on a standard home insurance policy and a realistic problem in cities like Miami, Houston, and Virginia Beach. However, these same homeowners may not be aware that flood is considered to be a completely different peril than water. Additionally, flood is not covered under the standard home insurance policy. This difference can be very confusing for homeowners and is often a major source of conflict with insurers when a damage claim is deemed to be uncovered by the insurance policy.
A recent CBS News story illustrated the difference between floods and regular water damage. The issue has been at the forefront of many people’s minds in light of the damage recently caused by superstorm Sandy. At its most basic, a flood is considered to be an event of “rising” water whereas a regular water claim is considered to be the result of “falling” water. The distinction may seem minor and difficult to discern, but understanding the difference can help you to determine whether or not you have insurance coverage.
In the event of a storm such as Sandy, there are two main sources of damage as a result of water. For example, at the outset of the storm, rain driven by wind is the most likely cause. While the storm is pounding outside, your windows or roof may fail and allow in some water. This damage would be covered by the home insurance policy. However, once the storm has been raging for some time, sewer systems may be unable to keep up with the amount of rain and an accumulation of water starts to build. If this rising water reaches your home and causes damage to your basements, flooring, and other property, the home insurance policy would deny the claim.
Keep in mind that floods aren’t solely caused by heavy rainfall and inadequate drainage. The storm surge from the ocean that was brought on by the storm is also considered flooding and would be excluded. As a homeowner, the only way you can protect yourself in the event of flooding is to purchase a flood insurance policy. No standard home insurance policy will provide coverage for flood events. We recently published a blog post that explains the National Flood Insurance Program. If you have any potential of risk from flooding, you need to seriously consider a flood policy.
As an interesting side note, sometimes it’s not just water, but an inundation of mud that is the source of damage. Confusingly, “falling” mud such as a hillside that gives way in the rain is not covered by flood insurance whereas mudflows that are like a river of mud are covered by the flood policy. Instability of the earth is considered earth movement or settling which are specifically excluded by the home insurance policy. Mudflows, which have occurred in Washington DC and Los Angeles, on the other hand, are considered to be like floods and are covered under a flood insurance policy.