Does homeowners insurance cover a flooded basement?


Here’s a question thousands of homeowners and renters will be asking now that the recent heavy rains are abating: Will insurance cover the water damage in my basement? Unfortunately for most the answer is “probably not.” Standard Homeowners’ insurance does not cover damage from flooding, so unless you have a specific flood insurance policy, you will have to foot the bill for any water damage from the recent rains. The Insurance Information Institute offers this rule of thumb: water that comes from from top down (ice dams, for example) is generally covered, but when water comes from the bottom up, such as in flooding, it’s not covered.

Many homeowners who live in a low-risk flood area think they do not need to insure against flooding but the reality is that in any given year, about one-third of all claims paid by the National Flood Insurance Program are for policies in low-risk communities. Over a 30-year mortgage, your home has a 26% chance of being damaged by a flood, compared to a 9% chance of fire. Water damage repair can be costly – you can learn just how costly with this inch-by-inch interactive cost of flooding calculator.
You can learn more about floods, your risk of flooding, and the National Flood Insurance Program (NFIP) at Floodsmart.gov. Don’t get caught short – talk to your agent about flood insurance options – if you are in a low to moderate risk zone, insurance can be very affordable.

One thought on “Does homeowners insurance cover a flooded basement?

  1. Not so fast…
    Although the traditional homeowners policy doesn’t cover flood damage, and although Flood Insurance doesn’t cover ground-up leakage into a basement, many companies offer “sump-pump failure” coverage. It’s a great buy, and available through select companies.
    Insurance companies exclude flood under a traditional homeowners policy and the National Flood Program offers coverage for floods. But for people (like me, and many other homeowners in Massachusetts) who have a basement that floods when its really really rainy, any given April, or March 2010, we have to take responsibility to protect what’s ours in the basement. We installed a french drain along the inside edge that gets rain water; this leads to a sump pump which sends the water on its way. If the rains come and this solution does NOT work (the sump pump fails), this is where the sump pump insurance coverage comes into play. Resulting damages to built-ins and contents can be paid.
    Usually this is limited to $2,500 or $5,000 maximum payment, which keeps the cost low, but still provides a solid measure of assistance when you need it. It’s a good idea for anyone in New England, especially if you don’t buy Flood Insurance from NFIP, but use a sump pump to keep your basement dry.

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