Water damage can cost you hundreds of thousands in repairs depending on the severity, so it's important to be fully covered by your insurance policy. However, did you know that most insurance policies define flood damage and water damage differently? If you live in a flood-prone area, it's important to know whether or not you're covered if disaster strikes, and how you can get the utmost possible protection for your home.
What's The Difference Between Water And Flood Damage?
While both can fill your basement and cause significant damage, flood and water damage have distinctly different definitions for the purposes of home insurance.
Water damage is typically caused by accidents involving your home's plumbing. Burst pipes and leaky appliances that release water into your home cause water damage. Typically snow, sleet, or rain that causes leaks in the roof of your home can also be covered under a water damage policy. Water damage is covered in a standard homeowner's insurance policy.
Flood damage, or "rising water" damage is typically caused by weather problems such as heavy rain, flash floods, landslides, and tidal waves. Backed up sewer or water mains are also typically included as flood damage, not water damage, despite smaller burst pipes being covered under a water damage policy. Flood damage is not covered in a standard homeowner's insurance policy.
Are You Eligible For Subsidized Flood Insurance?
If you live in a flood plain, a region designated by the government as being prone to flooding, you may be required by your lender to have flood insurance. Fortunately, the government offers subsidized flood coverage through FEMA via the National Flood Insurance Program, or NFIP. Only citizens of NFIP-participating communities can receive flood coverage from the government.
Through the NFIP, you can receive up to $250,000 in flood insurance from FEMA at subsidized cost. This flood coverage applies only to natural disasters, however, so it will not protect you from certain flood damage, such as backed up sewer mains. New policies acquired through the NFIP take effect up to 30 days after purchase, so it's important to find out early whether or not your home qualifies.
If you want to find out whether or not your community participates in the NFIP and whether you are qualified for flood coverage, you can look up your region on the FAME website.
Does Homeowner's Insurance Cover Flood and Water Damage?
Though a typical homeowner's policy will not include flood damage by default, you aren't locked out of flood protection if you live in a non-NFIP community. If you aren't eligible for NFIP coverage, you can still purchase an added flood insurance rider from a private insurance company to help you recoup the costs of flood damage.
Flood riders can function slightly differently from your standard insurance policy. For example, rather than paying your typical deductible, you may have to pay a percentage - often close to 5% - of your home's worth for the deductible in the event of flood damage. This means you could end up paying thousands of dollars in the event of serious flood damage, so it's important to have money saved up and to invest in protective measures such as levees and flood walls if you live in a high-risk area.
You can also purchase a flood rider from a private insurance company even if you do live in an NFIP area, and you can have policies through both the government and a private insurance company concurrently. This enables you to add up to $250,000 of flood protection insurance to your home, on top of whatever your current NFIP coverage allows. You can also opt to have private coverage instead of NFIP coverage, even in a participating area. Most lenders will only require that you have flood insurance from any lender and not from the the NFIP specifically.
Don't take your insurance policy for granted. Call your provider and ask if you're covered in the event of a flood or other rising water disaster. When bad weather strikes, you don't want to be left holding the check for thousands of dollars in damages. Be sure your home is covered and you won't have to stress the next time you're faced with rising tides.
Check out sites like http://www.moldfireflood.com to find local professionals to help you restore your home.