Why is Flood Damage Excluded from Property Insurance?
There are a few common exclusions you may come across when it comes to property insurance such as home insurance , renters insurance and commercial property insurance. One of these exclusions includes flooding. Damage to your property caused by flooding is not often covered by property insurance, although there is no clear reason why this is. One reason may be that natural flooding, accidental flooding and intentional flooding can be hard to differentiate when it comes to investigating a claim.
Either way, it is important to know about this exclusion so that you can fill in the gaps of your property insurance policy.
How Does Flood Insurance Work?
Flood insurance often comes as an additional policy or endorsement to your other property insurance policies. Not all insurance providers offer this insurance, however. If you need flood insurance, it is important to find an insurer that offers this additional coverage.
When you do purchase flood insurance, it works much the same as any other property insurance policy. If your property is damaged by a flood, contact your insurer. They will send an underwriter to investigate the claim’s validity and calculate how much compensation you may receive based on the damages and your policy. Only once the claim is approved will compensation be provided.
Is Flood Insurance Expensive?
On its own, flood insurance is relatively inexpensive, although the cost depends on a variety of factors such as:
- Your flood risk (including location)
- Coverage limits
- Value of the insured property
- Deductible
A higher deductible may mean lower monthly premiums, but it also means paying more out of pocket if you ever have to file a claim.
Your flood risk is perhaps the biggest factor concerning your flood insurance rates. If you live in an area with frequent flooding, often known as high risk flood zones, you will likely pay more for flood insurance than those who live outside of it. However, floods have become an increasing issue across the U.S., including in areas that previously did not have trouble with flooding.
Flooding costs billions of dollars in damage across the U.S. each year. This is why it is important for property owners to consider flood insurance when looking to protect their business, home or personal property. Flood insurance generally covers against natural floods, but you may be able to add endorsements to cover flood damage caused by sewer and pipe damage, as well.
Also Read: Does Flood Insurance Cover Burst Pipes?
