Flood Insurance: Protection, Prevention, & Preparedness

Flood insurance is extremely important, particularly to homeowners in New Jersey who live in at-risk areas.

It’s important because flood damage can be very costly, and despite all the precautionary measures you can take, natural disasters such as Hurricane Sandy will always happen.

With that in mind, in this article, we will “dive” into some basics of flood insurance, provide tips on how you can prevent water damage in your home, discuss whether certain damages such as mold are covered, and offer advice to prepare for natural disasters.

The Basics of Flood Insurance

Many cities and towns have been built near waterways for easy access to fresh water and transportation (or the beach!) Unfortunately, these areas are often located in flood plains.

If you live near a flood plain, you’ll want to make sure you have flood insurance. Why? Continue reading to find out more.

It’s Not Part of Your Homeowners Policy

Most homeowners policies don’t cover flooding, so a separate policy will be needed.

Flooding is the most common natural disaster in the United States; however, floods aren’t always caused by natural disasters. Heavy rain, snow thaw, and poor drainage are also major contributors to flooding.

It May be Required

If you have a home mortgage from a federally regulated or insured lender, which is likely, you will be legally required to carry flood insurance on your property. This will certainly be the case if you live in a flood plain.

The National Flood Insurance Program

In certain areas, the risk of flood, and major claims, may be too high for insurance companies. For this reason the government established the National Flood Insurance Program (NFIP).

If your property is located in an area prone to flooding, you may qualify for the NFIP. The Flood Insurance Rate Map looks at the flood history of every area for the past 100 years to determine whether or not a property is eligible.

Know What’s Covered

If you have a flood insurance policy it probably won’t protect you against all damage caused by water, like damage caused by mold, mildew, or moisture that could have been prevented.

For example, if your home floods and you don’t take the necessary steps to quickly dry it out, your claim for mildew or mold damages could be denied.

Being the lowest part of your home, basements are the most prone to flooding. Coverage for basements is limited, even under the NFIP. Personal belongings, ceilings, walls, and floors typically won’t be covered under most policies. Property like circuit breakers and furnaces, however, will be.

Flood policies also won’t cover damage caused by drain or sewer backups. This coverage would require additional endorsements.

Protecting Your Home From Water Damage

Water damage is one of the more common hazards facing homeowners in the United States.

Even homes located well outside of high-risk flood zones can experience significant losses when a heavy rainstorm hits due to flooding and property damage. With proactive maintenance, you can lower the chances you’ll be forced to clean up a soppy mess.

Have the Right Insurance

Many homeowners are unaware that their homeowner’s policy doesn’t cover all damage caused by flooding. Instead of presuming you are covered in the event of a loss, read your policy thoroughly and ask your agent for clarification if necessary.

As a general rule, water damage coverage includes flooding that originates inside the home (broken pipes, ruptured water heater, cracked washing machine hose) but not in the event of water entering the home from outside.

Leaky roofs may or may not be covered depending on the age of your roof and in many cases, failure to keep up with routine maintenance will void your policy. Flooding caused by rising groundwater is rarely covered without an additional policy.

Fix Small Leaks Immediately

Small leaks turn into big leaks. When you find a drip, don’t procrastinate – fix the leak right away.

Replace Hoses and Appliances

Washing machine hoses should be replaced every 5 years regardless of their condition. Keep a log book and swap out this potential flooding hazard before the rubber gets weak.

Check other water hoses annually for wear and tear. Most kitchen taps, bathroom faucets and toilets are installed with a hose that will eventually need to be replaced. If in doubt, replace it. A $5 hose beats $5,000 in dry rot.

The average lifespan of a hot water heater rarely extends past 10 years. Once your heater is 5 years old it will require an annual revision to check for rust and leaks in the connections.

Insulate Pipes

Frozen pipes that burst when the water expands are a major cause of flooding during the winter. Insulate any pipe that is not fully enclosed inside a wall and do not leave your home unheated for extended periods of time during extreme cold.

Consider leaving a small drip of water running when temperatures drop below 0 Fahrenheit.

Conduct Basement Maintenance

  • Periodically check basement and foundation walls for fissures and cracks. Repair immediately.
  • The cost of waterproofing your basement pales in comparison to the cost of even moderate water damage.
  • Routinely test your sump pump and install a battery-powered backup pump in the event of a power outage.
  • A water alarm can provide early warning that water is accumulating in your basement.

Conduct Exterior Maintenance

Take a walk around your home during a heavy rainstorm to see how well your property is graded. If water is flowing towards your home or accumulating, you will need to make adjustments to improve drainage.

Is Mold Covered?

It can be difficult for homeowners to determine exactly what their insurance policy covers. Unfortunately, when it comes to mold, there is no straightforward answer.

Homeowner Should Take Basic Maintenance Steps

Policies are usually pretty clear on this issue. If the insurance company can reasonably conclude that mold buildup could’ve been prevented by proper homeowner maintenance, they will not cover damage or removal.

It All Comes Down to Covered Perils

In general, homeowners insurance policies will cover mold damage and removal only if the cause of the mold is a “covered peril”. “Covered perils” are essentially sources of damage typical to homes. Common covered perils are:

  • Fire
  • Vandalism or malicious mischief
  • Vehicular damage
  • Theft
  • Falling objects
  • Weight of ice or snow
  • Accidental and sudden, unpreventable flooding that is NOT related to an actual flood

Notice that very few of these items are likely to lead to mold growth within the home. So in the majority of cases, mold is not covered by homeowners insurance.

Taking Out an Additional Policy

If you are worried about having insurance coverage for mold and mildew, investing in a separate flood insurance policy could help.

However, even with the additional policy, the insurance company will decide on coverage depending on the situation. They will likely analyze if the mold and mildew could have been prevented by homeowner maintenance.

Consequently, it is vital to take regular, proper care of the home prior to making a successful mold or mildew insurance claim.

Homeowners should stay on top of ventilation in bathrooms, fix faulty plumbing immediately and take steps to prevent rainwater from seeping into basements and crawl spaces.

Policies vary, so you should get to know yours and what it says about mold coverage.

Preparing for Natural Disasters

The natural reaction to a disaster or potential disaster can be to panic, which can lead to poor decision making.

Ward off panic by preparing in advance for natural disasters you and your family could face at home.

Create a kit and go bag

An emergency kit is meant for the home and a go bag is for disasters that can force you to leave, but they contain mostly the same items. Below are some items you should have on hand, according to ready.gov:

  • One gallon of water per person for drinking and sanitation; in a go bag, opt for less to make it easy to carry
  • A three-day supply of non-perishable food; in the go bag, opt for lightweight snacks to get by
  • A hand-crank or battery-powered radio and a NOAA Weather Radio with tone alert
  • Flashlights and extra batteries
  • A first aid kit
  • A manual can opener
  • Cell phone chargers and a backup solar battery supply
  • Prescription and non-prescription medication, such as pain relievers and antacids
  • Copies of vital documents
  • A blanket or sleeping bag for each person
  • A change of clothes

At the minimum, you should have a kit and a go-bag in your home. However, it is recommended that you have them in other locations as well, such as your car, office and secondary or vacation properties.

Make a Plan

Because things can get chaotic in a disaster, you need to know what to do and where to go in advance. There should be three previously designated spots where your family will gather in the event of an emergency.

The first should be in your home near where the kit and go bag are kept. The next should be somewhere directly outside the home. The third should be in the vicinity of your home, but a bit farther away.

Conduct Drills

Just as at your school or workplace, you should conduct safety drills at home, including:

  • Fire drills, practicing from various starting points to help your family learn the ideal routes out of your home
  • General evacuation drills, where each member of the family has specific roles, such as grabbing the go bag, counting heads etc.

To ensure that you are also prepared for the aftermath of any natural disaster, in particular, by having the right flood insurance, speak with your insurance representative.