The Unexpected Consequences of Neglecting Flood Insurance

When Hurricane Harvey made landfall in Texas in 2017, it brought unimaginable destruction. In just four days, more than 51 inches of rain besieged the region, leading to severe flooding. Despite the chaos, many were surprised to learn that over 200,000 homes suffered damage even though they were outside of designated flood zones. This article delves into the importance of flood insurance, particularly for properties not located in known flood areas, and what happens when you underinsure or lack it entirely.

Flood Insurance: Necessity or Luxury?

Flood insurance is a crucial component of any homeowner's insurance portfolio, especially in regions historically prone to flooding. However, many homeowners mistakenly believe that flood insurance is only necessary if their property is within a flood zone. Unfortunately, this assumption can be costly when unexpected disasters strike, as seen during Hurricane Harvey.

Complications with Standard Homeowners Insurance

When homeowners are unaware that flood insurance is separate from standard homeowners coverage, they face significant costs and potential loss. Standard homeowners insurance primarily covers damage from fires, theft, and certain natural disasters such as tornadoes and lightning. However, it specifically excludes damage from flooding, which is defined by insurance companies as standing water resulting from rain, snowmelt, or dam breaches.

Seeking Assistance from FEMA

While many homeowners might assume that their losses are covered under standard insurance, there are other avenues to consider. For instance, if your primary home (owned or rented) is flooded and your community is declared a disaster by the President, you may be eligible for assistance from the Federal Emergency Management Agency (FEMA).

Eligibility Requirements for FEMA Assistance

To be eligible for FEMA assistance, you must meet certain requirements. These can include documenting the property damage, proving that you have exhausted all other financial resources, and demonstrating that the damage is severe enough to qualify as a disaster. However, even with FEMA assistance, there are limitations and it typically does not cover the full extent of the damages.

Water Damage: A Complex Claims Process

Insurance claims related to water damage can be particularly contentious. Insurance companies often employ very specific definitions of what constitutes "flood" damage. For example, a claim for sump pump failure or backup of sewers may be limited to a sub-limit of $2,000, or may be completely excluded if the company defines the cause as flood. This complexity can leave homeowners facing significant out-of-pocket expenses and compounding financial strain.

Protecting Your Property

While standard home insurance may not cover flood damage, it's important to be aware of the risks and take necessary precautions. Here are a few steps you can take:

Keep an eye on local weather patterns and prepare for potential storms and heavy rainfall. Ensure your property is elevated and well-drained to reduce water risks. Consider obtaining flood insurance to protect against unexpected water damage. Regularly check your sump pump and other drainage systems to ensure they are functioning properly. Stay informed about changes in flood risk in your area, including dam construction and other infrastructure changes.

Conclusion

While the initial damage from Hurricane Harvey in 2017 was widespread, the long-term impact of insufficient flood insurance can be profound. Understanding the intricacies of insurance policies and being proactive about protecting your property can make a significant difference when disaster strikes. Whether you live in a flood zone or not, it's always wise to consider the full range of risks and potential outcomes when it comes to protecting your home andassets.

Contact Information

For more information on flood insurance and disaster preparedness, please contact your local insurance agent or visit the National Flood Insurance Program (NFIP) website for detailed guidance.