Rain damage and floods account for 90 percent of all natural disasters in the U.S., according to the Federal Emergency Management Agency (FEMA). Even if you aren’t in a high-risk area, you’re still at risk of flood damage since 20 percent of all flood claims are filed in low to moderate risk areas. Mortgage lenders, local officials, or insurance professionals can tell you if your location has a history of flooding. Also, flood risk information for your area is available from The National Flood Insurance Program (NFIP).
Even though you can’t control the weather, you can reduce your risk with the right insurance coverage. Insurance is tied to the cause of damage and coverage under your homeowners or business insurance policy doesn’t apply to excluded perils, such as flood, landslide, mudslide, and mudflow. Also, additional living expenses (ALE) and business interruption are not covered. Fortunately, there are insurance policies that cover these events. Here’s what you need to know.
Floods aren’t covered under homeowner’s, renter’s, or business policies. Only a flood insurance policy, usually administered through the federal government, will cover flood-related losses. Flood policies are available from insurers under contract with FEMA. Here’s what a flood policy does:
What to know when buying flood insurance:
Without insurance, flood relief comes mainly from loans. If your area is declared a disaster area, no-interest or low-interest loans are usually made available by the federal government, but they must be paid back, which means you’re still on the hook for the entire cost of damages or losses.
Beyond the danger of flooding, heavy rainfall can also lead to landslides, mudslides, and mudflows, that require insurance separate from a homeowner’s or business policy. Landslides and mudslides are primarily earth movement, while a mudflow is caused by water picking up soil and turning into mud. Since landslides and mudslides are typically propelled by gravity and don’t contain enough liquid to seep into a building, they aren’t covered by flood insurance policies. The primary ingredient of a mudflow, however, is water, and flood insurance will typically cover this type of loss. Here are some other things to know:
If you’re worried about risk from floods, landslides, mudslides, or mudflows, our insurance professionals would be happy to help you figure out the right coverage for your situation.