Does Flood Insurance Cover Hurricanes?

And hurricanes tend to drop a whole lot of rain at once, leading to devastating storm surges, overflowing bodies of water and detrimental flooding. So how does flood insurance help with hurricanes? Well, in a lot of ways, actually.

While flood insurance doesn’t cover the damage caused by hurricanes, it does cover flooding due to hurricanes. Those floods could be caused by rising storm surge, overflowing bodies of water, like lakes and rivers, or just torrential rainfall the hurricane leaves in its wake that seeps through your home’s foundation.

If your home sustains flood damage caused by a hurricane, your flood insurance policy will help pay to repair your home (if you’re a homeowner, condo owner or landlord), repair or replace any personal belongings that were damaged or destroyed, and even reimburse you for unexpected living expenses if the floodwaters force you to temporarily move out while your home is being repaired. However, many flood insurance policies don’t cover damage to your basement.

Although flood insurance isn’t legally required, it may be required by your lender depending on which flood zone you live in and how much you still carry on your mortgage. It’s also important to note that flood insurance will only cover damage directly caused by floods. It won’t cover damage caused by the hurricane itself.

So if a hurricane tore off your roof, allowing rainwater to pour in and flood your living room, the initial cause of damage would be a direct result of the hurricane and your home insurance policy would likely be the policy you’d need to rely on.

It’s estimated that just 1 inch of floodwater can cause $25,000 in damage. Much of that damage will be to the flooring and walls in your home. And if you own the property, you’d better have flood insurance to help you out.

Flood insurance includes dwelling coverage, which is designed to repair or rebuild your home’s structure if it’s damaged by a flood. That coverage can go toward things like your home’s flooring, drywall, insulation, and much more.

But depending on which flood insurance company you go through (we’ll get to that a bit later), you’ll either have replacement cost or market value coverage on your home.

Replacement cost coverage is the standard option, covering the cost to repair or rebuild your home based on the labor and materials that created it. Market value coverage repairs or rebuilds your home based on its value at the time of damage.

The second type of coverage found in flood insurance policies is personal property coverage. This is designed to repair or replace any personal belongings that were damaged by floodwaters. So things like furniture, electronics and clothing would be protected.

Again, depending on your flood insurance provider, you can either opt for replacement cost or actual cash value coverage. Replacement cost coverage simply reimburses you the amount you paid for an item when you first purchased it. While actual cash value coverage factors depreciation of the item into your reimbursement.

The final piece of flood insurance is loss of use coverage. It helps pay for unexpected living expenses if the flood damage is so severe that you must temporarily move out of your home while it’s being repaired.

These expenses can be extra gas money you spend due to longer commutes, eating out because you can no longer cook in a kitchen, moving expenses and, most importantly, a rental property or hotel of equivalent value.

Depending on which flood zone you live in, that will determine whether you can secure a flood insurance policy from a private insurer or if you have to go through the government’s National Flood Insurance Program, which is run by FEMA.

If you’re in a low- to moderate-risk flood zone, you’ll pretty much have the pick of the litter of which policy you’d like. But if your home is located in one of the FEMA-designated high-risk flood zones, that means your property is at risk of flooding at least once every 30 years. In that case, you’d likely be denied by private insurers that deem you to be too risky and be forced into a policy from the government.

As a government-issued policy, the coverage and payout limits are much lower through the National Flood Insurance Program (NFIP). For homeowners and landlords, you can only insure your home’s dwelling for up to $250,000 and your personal property for $100,000. So if your home is worth more than that and your belongings top that valuation, you’d already be underinsured.

The other key thing to note is that the NFIP only offers actual cash value coverage of your personal belongings, so that policy would factor depreciation into the value. It also doesn’t provide loss of use coverage or help repair any damages to structures on your property that aren’t connected to your home, like a detached garage.

With private flood insurance, on the other hand, you can insure your home for its total value, opt for replacement cost coverage for your personal belongings, enroll in loss of use coverage and sleep easy knowing that some other structures on your property are covered.

By using Clovered’s online quoting form, you simply include a few details about your home and our agents will do the rest, running your data through our platform and finding you a policy that fits your needs — and your budget.