Flood Insurance Information
During the past 10 days the Midwest has dealt with record flooding. Emotions are high, people have significant property damage and like most “Act of God” catastrophe events there is fact and fiction floating around involving insurance. This message is my attempt to answer / dispel. I completely understand that my clients may have a specific circumstance and my staff and I are very ready to serve. We work for our clients NOT the insurance company. I can assure you that if there is an angle that may allow coverage to be in play we will help you identify that within the laws of insurance.
There is a great website that offers a lot of information. www.floodsmart.gov
What is FEMA’s legal definition of a flood?
A flood is a general and temporary condition where two or more acres of normally dry land or two or more properties are inundated by water or mudflow. Many conditions can result in a flood: Hurricanes, broken levees, outdated or clogged drainage systems and rapid accumulation of rainfall.
Is Flood a covered peril on home and commercial / business property policies?
No and there is no endorsement I or any other insurance agent or company can sell you that will include it. You can get sewer backup, sump pump failure, pipe breakage, pipe freezing, wind or lightning damage allowing rain to enter the property, sudden escape or explosion from an appliance and fire dept. causing water damage putting out a fire. There are programs within commercial / business packages that offer flood but, only if the property is located outside a flood hazard territory.
Will flood insurance pay for removal or preventative action?
No. Flood insurance only pays when there is actual damage. When a person has a property within a flood hazard area they are assuming the risk there may be a potential of having to remove and protect the property and that cost of on the property owner. There is no endorsement available to pick this up.
My sewer did not back up. My sump pump was working properly; but, my basement is still leaking? Is that covered by my home insurance?
Every circumstance may be a bit different; but, most of the time the answer is no. This does not mean you have weak insurance coverage or a poor insurance carrier. There is no endorsement I or any other agent or carrier can sell you that would pick up this coverage. There is a major gap between normal property insurance and flood insurance for coverage in regards to basements and it is as follows :
Property insurance won’t cover it because it’s considered flood or maintenance.
Flood insurance won’t cover it because spaces below grade are excluded except for property used to serve the building like HVAC (furnace), hot water heaters, boilers …etc. that can’t be easily removed. That’s right…. flood insurance won’t pay for your contents in your basement nor will it pay to restore your finished basement.
The storm sewer outside and near my home could not handle all the water and it ended up flowing into my home. Is that a sewer backup claim?
By insurance legal definition the answer is no; however, most often when this happens the sewer also backs up in the basement. You can generally go by the condition of water that entered the building. If it clearly involves sewage than you should have no problem executing a sewer backup claim.
My normal property insurance nor flood insurance will pay for the damage and clean up in my basement. What if I get mold / fungus? Is the cost to remediate covered?
If you can show that proper action was made to eliminate the potential of mold / fungus you do have a minimal amount of coverage for remediation. Most policies allow a limit of $5,000; however, I always warn my clients that you do not want to use this coverage unless it is absolutely necessary because it will be documented on public record and you will have to disclose this when you are selling the home. It is possible this may deter potential buyers. Often times it can be eliminated on your own without hiring a professional.
Should I hire professional water remediation contractor?
It’s hard for me to answer this without seeing the damage. Most of the time I will tell you that you should because they have the proper equipment, the experience, the ability to get rid of the debris, the chemicals to kill mold / fungus and most importantly, they can do moisture readings behind walls and in areas you can’t get to. If you need a referral my office highly recommends the following : GOING GREEN — Rob Waldbueser 314 973 2420 and Jaime Schmidt 314 713 0995 www.goinggreen-stl.com (You need to beware of “storm chasers”. If a contractor knocks on your door, stay away)
Feel free to pass this to your friends, family, neighbors and co-workers even if I am not their agent.
Shawn P. McBride