I have a “flood” in my basement. Am I covered for flood?

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In order to properly answer this question, we must first define what a “flood” is. According to the Insurance Institute of America, 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. A flood is when water originates from a source OUTSIDE of the home, such as a nearby body of water, and spills into the home. Standard homeowners and renters insurance does not cover flood damage. Flood coverage, however, is available in the form of a separate policy both from the National Flood Insurance Program We will obtain that coverage for you upon your request.

It is important to note that water inside a home that originates from a faucet, drain, pipe, sewer line, or storm drain, is NOT considered to be under the definition of “flood. If a break occurs inside the home, and causes water damage, that damage is already included in a standard HO-3 policy. If the water backs up through a drain or pipe system without a break inside the home, (for example, through a sump-pump), this is actually referred to as “water and sewer back-up”. This would be covered under homeowner’s policy but ONLY IF water and sewer back up coverage is added. We strongly suggest adding this coverage to your home insurance, so that you are not left “high and dry”. (Or is that low and wet…?)

The NFIP provides coverage for up to $250,000 for the structure of the home and $100,000 for personal possessions. The NFIP policy provides replacement cost coverage for the structure of your home, but only actual cash value coverage for your possessions. Replacement cost coverage pays to rebuild your home as it was before the damage. Actual cash value is replacement cost coverage minus depreciation so that the older your possessions are, the less you will get if they are damaged. There may also be limits on coverage for furniture and other belongings stored in your basement.

Flood insurance is available for renters as well as homeowners. You will need flood insurance if you live in a designated flood zone. But flooding can also occur in inland areas and away from major rivers. Consider buying a flood insurance policy if your house could be flooded by melting snow, an overflowing creek or pond or water running down a steep hill. Don’t wait for a flood season warning on the evening news to buy a policy—there is a 30-day waiting period before the coverage takes effect.

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