What Does Flood Insurance Cover? What If You Lack Flood Insurance?

The human catastrophe of Hurricane Harvey continues to unfold. The financial challenges, unfortunately, have just begun.

Nationwide over 40 percent of homeowners think the standard homeowners policy covers flood damage from heavy rain, according to Insurance Information Institute public opinion surveys.

It doesn’t. It covers a hurricane’s wind damage, not its floods. This post outlines what a flood insurance policy covers and describes federal help if you lack flood insurance.

And the misconception – homeowners insurance covers flood – has a toll. Other I.I.I. surveys indicate that nationwide only 12 percent of homeowners have flood insurance.

In Harris County, Texas, 15 percent of homes are protected by flood insurance, according to data from the federal National Flood Insurance Program (NFIP) – which sells the overwhelming majority of residential flood policies. (A few private insurers also offer flood insurance.)

The standard NFIP policy covers . . .. . . damage for up to $250,000 to the structure of the home and $100,000 for personal possessions. Replacement cost coverage is available for the structure of your home, but only actual cash value coverage is available for your possessions.

(Replacement cost coverage pays to rebuild your home as it was before the damage. Actual cash value factors in depreciation so that the older your belongings are, the lower the payout.)

In your basement, some things are covered, but some are not. Essentials like a water heater, oil tank and electrical panel are included. Furniture, carpeting and other non-essentials are not.  Additional living expenses – the cost of living somewhere else till your home is habitable – and food spoilage are not covered.  Details here.

Flood insurance has a deductible and is administered through most leading insurance companies, who can help you to settle your claim with the NFIP. Details on filing a claim (in several languages, including a video in ASL) are here.

Other insurance options

Some people purchase flood insurance that covers what NFIP does not. Excess flood insurance provides protection above NFIP limits. It is available from private insurers for higher valued properties and for those living in a community that does not participate in the NFIP. These policies have no deductible and cover additional living expenses.

Options for those without flood insurance

For homeowners impacted by Harvey who did not purchase flood insurance, disaster assistance may be available through grants from the Federal Emergency Management Agency (FEMA). These can help pay for temporary housing, emergency home repairs, uninsured and underinsured personal property losses and medical, dental and funeral expenses associated with the disaster.  Apply online at  www.DisasterAssistance.gov or call 800-621-3362 or (TTY) 800-462-7585, 7 a.m. to 10 p.m. seven days a week.  FEMA’s Housing Assistance program is available, regardless of income, to anyone who has suffered damages or losses in disaster-declared counties. Aid for other losses such as personal property, vehicle repair or replacement, and moving and storage expenses is income-dependent.

FEMA does not pay to return a home to its pre-disaster condition. FEMA provides grants to qualified homeowners to repair damage not covered by insurance, but these grants may not pay for all the repairs. An SBA disaster loan, on the other hand, generally provides the funds to fully repair a home. To be considered for a grant for these types of losses, the applicant must complete an application for an SBA loan.

Here are a bunch more links to help you out:

Related Links

Articles: How do I file a flood claim?How do I file a homeowners claim?

 

RESOURCES:

Insurance Council of Texas

National Flood Insurance Program

Small Business Administration

Texas Department of Insurance

Texas Insurance Windstorm Association

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