Flooding is a danger that is often excluded from property insurance policies, such as home insurance and renters insurance.
Thankfully, you can often purchase an additional flood insurance policy to cover water damage to your home and personal belongings. Unfortunately, even flood insurance can't cover everything.
What Is Covered Under Flood Insurance?
Flood insurance covers loss of or damage to your home or belongings due to a sudden and unexpected excess of water. This can be due to severe thunderstorms, natural flooding or broken pipes. Water damage within the home, however, has certain limitations and rules of its own.
There are two types of flood insurance policies: actual cash value policies and replacement cost value policies. Actual cash value provides compensation for losses while accounting for depreciation. This means that as the value of your insured belongings goes down, so does the amount of compensation you can receive.
Replacement cost value policies provide compensation without accounting for depreciation, so that you can replace your belongings with items of equal or similar value.
Equipment and fixtures normally covered under flood insurance include:
- Electrical systems
- Plumbing systems
- Water heaters
- Refrigerators and stoves
- Permanent carpeting, cabinets and paneling
- Foundation walls
Limitations Under Flood Insurance
There are certain exceptions when it comes to the coverage afforded under flood insurance. Some items may be excluded or have limited coverage, such as jewelry, art and furs.
Some circumstances also are not covered. Any accidents that could be determined as the homeowner's fault will not be covered. When you file a flood insurance claim, an underwriter from the insurance agency will investigate the claim. If they discover that a burst pipe was caused by negligence, such as normal wear and tear that was not taken care of, your claim is likely to be denied.
Filing a claim for burst pipes, then, is tricky - and these claims are often denied. Burst pipes can occur for a number of reasons, such as buildup, natural floods and a lack of maintenance. Normal sewer backup is not covered under flood insurance. If the backup is caused by other flooding, however, then you will likely be covered for the resulting damages. To cover sewage issues, you will need sewage backup coverage.
If there is a leak that leads to burst pipes, you likely won't be covered. Be sure to keep up maintenance on your home to avoid accidents that may not be covered under insurance.
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