Even if you’re miles from the nearest body of water, flooding is still a possibility—especially during spring and fall storms. As a homeowner, you want to be prepared with proper insurance.
You probably already know that standard homeowners insurance doesn’t cover flood damage. For that, you need flood insurance. That makes sense.
But did you know that what you might consider flood damage may not be covered by flood insurance at all...but instead by something called water backup insurance?
Here’s the difference between them.
A flood is an excess of water (or mud) that rises and usually enters the home through a door or window well. This is often the result of heavy rainfall or melting snow that causes nearby bodies of water to overflow. Flash flooding occurs when a large amount of rain falls in a short span of time.
According to the FEMA (Federal Emergency Management Agency) definition, a flood is a general, temporary condition where water (or mud) covers at least two acres of land that is normally dry, or has damaged two or more properties. The water must come from one of these sources:
Why is the FEMA definition important? Because even though you purchase flood insurance through a private insurance agent, it is provided by the National Flood Insurance Program, administered by FEMA. You must live in a participating community to qualify for NFIP insurance. If you have a mortgage through a federally regulated or insured lender, you are required to purchase flood insurance if your home is in a high-risk area.
Flood insurance covers damage from rising waters, not falling water like damage to walls from rain (this may be covered by homeowners insurance). Building and contents coverage are separate, and coverage is limited in basements. Water damage resulting from a failed sump pump isn’t covered, and water damage caused by a sewer backup into the home can only be covered if it’s a direct result of the flooding.
That’s where water backup insurance comes in.
Excess water can cause sewers and drains to back up into your home, usually through a sump well or fixtures in your basement or lowest level. During severe storms, sump pumps can fail due to power outages, or simply can’t keep up with the deluge.
The next thing you know, you’re ankle-deep in water.
While you may describe this as a “flooded basement,” what you have as defined by insurance terminology is actually water backup.
Water backup coverage is usually offered as an additional endorsement to your homeowners insurance policy, though it may not be available in high-risk flood hazard areas. Always check the details when considering a policy, as some backup policies cover sewer backups but not sump pump failures.
It’s important to note that water backup insurance doesn’t cover damage from foundation seepage.
Whether you need flood insurance, water backup insurance, or both in addition to your homeowners policy depends on many factors. These include where your home is located, your flood risk, the terms of your mortgage, and the structure of your home.
An insurance agent can help you understand your options. As with any insurance policy, always go over the specifics and fine print before purchasing. Make sure you have a thorough understanding of what your policy does and does not cover, and ask questions about anything that isn’t clear. You want to make sure you’re covered the next time the storms roll in.