Does Flood Insurance Cover Basements?

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  • Does Flood Insurance Cover Basements?

If you have flood insurance from the National Flood Insurance Program, you’re probably well aware that it has strict limits. It doesn’t protect everything on your property. To the likely frustration of homeowners in northern states, your basement is one area of your home where the government’s flood insurance restrictions really come into play.

Below, we’ll break down exactly how flood insurance covers basements, so you’re not caught by surprise if an unfortunate disaster does strike.

What Does Flood Insurance Cover in Basements?

Yes, flood insurance covers basements, although the extent of coverage is limited. The NFIP won’t cover everything in your basement, only certain parts of the structure of your dwelling and select personal belongings. It covers much less in your basement than it does in the rest of your home.

The NFIP defines a basement as any area of a building where the floor is below ground level on all sides, including any sunken room or sunken portion of a room. So, crawl spaces or split-level homes with floors below ground level could also be considered basements by the NFIP.

NFIP Building Basement Coverage

NFIP policies are divided into building coverage and contents coverage. Building coverage typically protects the structure of your dwelling, like the walls, windows, and floor, and its permanent features, such as carpeting, appliances, and cabinets, from flood damage. Building coverage for NFIP policies maxes out at $250,000.

When it comes to a flooded basement, though, you’ll find that building coverage changes a bit. Some examples of covered items include:

  • Unfinished stairs and drywall of unfinished walls
  • Furnaces and water heaters
  • Air conditioners
  • Sump pumps
  • Some foundational elements
  • Debris removal

The NFIP limits coverage for any basement improvements. They only protect the things that will keep your basement “safe, sanitary, and functional.”  So, paint and panelings on finished walls, as well as carpets on finished floors, won’t be covered. Additionally, for coverage for furnaces, water heaters, and other HVAC systems to apply, they need to be plugged in and installed in their functioning locations at the time of damage.

NFIP Contents Basement Coverage

Contents coverage in NFIP policies financially safeguards your personal belongings in case of a flood. This usually includes clothes, furniture, electronics, rugs, and some valuables in the above-ground parts of your home. Keep in mind that the contents coverage limit on NFIP policies is $100,000.

In a flooded basement, though, contents coverage is much more limited. NFIP contents coverage will only cover clothes washers and dryers and food freezers (if they were plugged in).

Government flood insurance won’t reimburse you for any other personal belongings in your basement after a flood, like furniture, electronics, or clothes. This is because the NFIP won’t cover improvements in your basement, just like with building coverage. 

When Does Flood Insurance Cover Basements?

NFIP flood insurance will reimburse you for damage in your basement caused by direct loss from a flood. The government’s definition of a flood won’t apply to all the scenarios in which your basement can flood, though.

The NFIP’s official definition of a flood is “a general and temporary condition of partial or complete inundation of two or more acres of normally dry land area or of two or more properties,” with listed possible causes of floods including:

  • Overflow of inland or tidal waters;
  • Unusual and rapid accumulation or runoff of surface waters from any source
  • Mudflow
  • Collapse or subsidence of land along the shore of a lake or similar body of water as a result of erosion or undermining caused by waves or currents of water exceeding anticipated cyclical levels

In layman’s terms, flood insurance can protect your basement (in a limited fashion, as we described earlier) from flooding caused by torrential rains, water from hurricanes, and mudflows.

But, flood insurance won’t come into play if you’re basement was flooded by:

  • Broken or burst pipes
  • Broken appliances
  • Seepage from groundwater
  • Sewage backup

Floods from broken pipes or appliances aren’t covered by flood insurance. Instead, you may be able to turn to your homeowners insurance policy. Home insurance can cover water damage from pipes if the flooding was sudden or accidental. If it’s discovered that a pipe or appliance gave way due to your failure to perform routine maintenance on it, the resulting water damage wouldn’t be covered.

Also, if negligence on your part allowed some initial water damage to worsen over time, your insurer may not cover the damages. For example, if you noticed a pipe leak, but didn’t report it until six months after you first saw it when the damage became more evident, your provider likely won’t cover you.

Seepage from groundwater into your basement may be covered by flood insurance if it’s directly caused by a defined flood. But, more often than not, groundwater can leak into your basement from a variety of causes not related to a flood. Foundation cracks or window openings that allow naturally occurring groundwater to leak in over time typically aren’t covered by flood insurance.

Any basement flooding caused by a sewer backup likely won’t be covered by an NFIP policy, either. You may be able to purchase an endorsement that covers sewage backup from your home insurance provider.

Stay Above Water With Flood Insurance

Do you want to pay for costly and common flood damage yourself or have an insurance policy pick up the tab?

Does Flood Insurance Cover Foundation Damage?

Yes, flood insurance will cover foundational damage that results directly from a flood. The NFIP mentions in their policy that they cover “ footings, foundations, posts, pilings, piers, or other foundation walls and anchorage systems required to support a building.”

All those things fall under the building coverage of an NFIP policy. The damage has to be caused directly by a flood, though.

Gradual erosion caused by water that shifts or compromises the foundation of your home likely won’t be covered, for instance. If you notice excessive runoff from heavy rains affecting your foundation, be sure to notify your flood insurer as soon as possible.

Even if foundational damage was caused by a flood, the NFIP may not cover it if you waited too long to report it and allowed the damage to worsen. This would be considered negligence on your part. You may also look to your homeowners insurance plan for some help with foundation damage.

Does Flood Insurance Cover Sump Pumps?

Flood insurance can protect your sump pump if it’s damaged by a flood. But, if your sump pump fails out of the blue one day, your flood insurance likely won’t cover it or the resulting flooding. Even an unexpected sump pump failure can likely be traced back to a long-standing issue that insurance companies aren’t responsible for.

The best way to protect your basement from flooding in the first place is with a sump pump. Unfortunately, they’re not perfect. Many of the ways sump pumps fail are normally excluded by insurers. They can fail from power outages, and flood insurance doesn’t cover power outages.

A lack of routine maintenance can also contribute to a sump pump not working as expected, and flood insurance doesn’t usually cover damage that can be traced back to policyholder negligence in some way.

If floodwaters themselves physically damage your sump pump, then your flood policy will likely help you out. Otherwise, your best bet may be to purchase an endorsement for your homeowners insurance policy that covers sump pump failure. Many home insurance providers offer them.

Filing a Basement Flood Insurance Claim

Finding your basement underwater is a clear panic-inducing scenario. To ensure everything goes as smoothly as possible, there are some steps you can take before filing a basement flood insurance claim.

Before wading into a basement that’s flooded, you should turn off the electricity and gas to your home. Circuit breakers and gas lines are commonly found in basements, and you don’t want to be stumbling around in water where a live current may be waiting.

After verifying things are safe, you should try to mitigate the damage to the best of your ability. Try to salvage as many personal belongings as you can since an NFIP policy won’t cover most of them anyway, and remove some water if you can. If the job is too much to handle, contact a professional.

You should also contact your insurance company as soon as possible. They’ll set up a meeting with an adjuster who will assess the damage. You may want to take pictures and videos to document as much damage as possible just after the flood.

Stay Above Water With Flood Insurance

Do you want to pay for costly and common flood damage yourself or have an insurance policy pick up the tab?

The editorial content on Clovered’s website is meant to be informational material and should not be considered legal advice.

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