When it rains it pours: Who needs flood insurance?

What’s the difference between flood damage and water damage?

Water damage is when your home, building and/or its contents is impaired by water coming through a leaking roof, from a broken pipe, or from a backup of a drain or sewer line. Most “special risk” homeowners and building policies cover this type of water damage.

However, most “special risk” policies do NOT cover flood damage. Flood damage occurs when surface water from outside of the building engulfs the inside of the building. Surface water can come from the overflow of a stream, river, lake, ocean, or even from the street due to heavy rain, snow melting, or a mudslide (note that mudslide damage is only covered specifically on a flood policy). If you are a city dweller, a water main break can also flood into your home or building.

When do you need flood insurance?

  • Your house/building is in a flood zone (if this is the case your mortgage lender will likely require flood insurance).

  • Your house/building is not in a high hazard flood zone, but is still near a body of water that could flood during extreme weather events (hurricanes, days of heavy rains).

  • Your house/building is on a steep slope or other similar obstacle (keep in mind that a mudslide can happen anywhere, not just in California).

  • You have a building/apartment at street level somewhere where it could easily be flooded by outside water.

How you do you buy flood insurance?

Flood insurance is a separate policy written by many different insurance companies, but is usually fully insured by FEMA through the National Flood Insurance Program (NFIP). A flood policy for a home is limited to a maximum of $250,000 on the “dwelling” and $100,000 of “contents”. It also has restrictions on the type of coverage for finished basements, replacement cost restrictions, and other limitations.

For better coverage on flood policies, there are also several options for what are called Excess Flood Insurance and Flood Gap Policies. These can cover higher value homes and fill in some of the gaps or other limitations in the NFIP policy.

Talk to us about your possible need for a Flood Insurance Policy (and please do it before the

snow melts or the 2019 hurricane season begins – there is a 30-day waiting period on any new NFIP policy before coverage becomes effective).

And remember: when it rains, it pours!