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September 2, 2021

Understanding Flood Insurance Exclusions

Flood insurance is an optional coverage designed to protect your home and belongings in case of a flood. You can often add this insurance to your home, renters or business insurance policy since floods are typically excluded from basic coverages. 

Unfortunately, even flood insurance won’t cover all water damage you may suffer. It is important to be aware of your policy’s limitations so that you aren’t caught off guard by a denied claim or lack of coverage.  

Sewer Backup 
Pipe bursts and sewer backups can cause a ton of water damage, but this damage unfortunately isn’t covered by flood insurance. However, if the sewer backup is directly caused by a flood, damage can be covered. 

Just like with other property policies, flood insurance does not cover damage that occurs due to negligence. In other words, if a homeowner fails to maintain upkeep on their pipes and one bursts, causing damage to the home, the damage will not be covered under flood insurance. 
man and woman sitting on couch in flooded house
Personal Belongings Limitations 
Unfortunately, not all of your personal items will be protected under your flood insurance policy. Certain items may have little to no coverage under flood insurance as with home insurance personal belongings coverage, flood insurance excludes certain items. Art, furs, jewelry and electronics have limited coverage under flood insurance. On average, coverage for artwork and furs caps at $2,500. Flood insurance also does not cover paper money. 

Ask your insurance agent about adding policy floaters to protect your expensive items. 

Moisture, Mildew and Mold 
Whether caused by a flood or not, claims concerning moisture, milder or mold damage will likely be denied. This is because damage by these incidents can typically be avoided by proactive actions by the property owner. Claims can be denied even if mold or mildew is caused by a flood if it’s decided that the damage could have been prevented. This is referred to as negligence, which is not covered under any property or flood insurance policy. 

Moisture often causes issues in tropical areas and states, such as Florida and other coastal states. Homeowners should understand that damage due to a moist atmosphere will not be covered under their flood insurance policy, so they should work to take preventive measures to avoid damage caused by their area’s atmosphere. 

Earth Movement 
Damage to the home from movements in the earth, even if caused directly by a flood, will not be covered under flood insurance. Earthquakes and sinkholes, for example, are not covered under flood insurance. 

Plants and Landscaping 
An average flood insurance policy does not cover plants, landscaping and certain unattached structures such as fences or outdoor signs. It also doesn’t usually cover items that are left outside on the property such as patio furniture or power tools. 

What Does Flood Insurance Cover? 
After viewing how much is excluded from flood insurance, you may be wondering what its purpose is and what it actually covers. In general, flood insurance covers you for a lot of financial loss and property damage in case of a natural flood. Areas that may be covered by your flood insurance policy include: 

  • Electric systems 

  • Furnaces 

  • Water heaters and plumbing systems 

  • Permanent carpeting 

  • Appliances such as dishwashers, refrigerators, washers, dryers, microwave ovens and cooking stoves 

  • Window blinds and curtains 

  • Permanent cabinets, paneling and bookshelves 

  • Foundation 

  • Walls and staircases 

  • Anchorage systems and detached garages 

  • Pumps, well water tanks, fuel tanks and solar energy items 

  • Personal belongings 

  • Window air conditioning units 

Flood insurance can help with the cost of repairs and replacement as well as some clean up, such as removing debris. 

Is Flood Insurance Worth the Cost? 
If you live in a high-risk area for floods, evaluate the benefits of carrying flood insurance and the possible expenses if you don’t have it.  

The average cost for repairing flood damage out of pocket is between $1,142 and $4,725. Damage to the home’s foundation or systems (such as electrical systems) tend to cost higher to repair or replace. In comparison, the average cost of flood insurance is around $699 a year (about $58 a month). 

This cost varies depending on the state, location within the state, value of the home, claims history, credit score and other factors. 

Some homes won’t necessarily need flood insurance. Any home in a relatively tropical area with a history of floods, however, should at least consider purchasing flood insurance. 

Be sure to shop around and compare quotes and policies. Not all flood insurance policies are created equal and you will need a policy tailored for your needs with the right limits at the right price. 

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Tags: flood insurance

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