Many homes had flooded basements and first floors after the weekend nor'easter. But standard homeowners insurance does not cover flood damage. Flood coverage requires a separate policy, either federal flood insurance (NFIP) or private flood insurance. Coverage goes up to $250,000 for the building and $100,000 for personal belongings, and renters can buy belongings-only coverage on its own. However, a policy takes effect only after a 30-day waiting period.
After the weekend nor'easter passed, many homeowners called their insurance companies. Many of them heard the same answer: "Flooding is not covered."
It is a widely misunderstood point. Standard homeowners insurance covers damage such as a roof torn off by wind or destruction caused by a fallen tree, but it generally excludes flooding caused by water coming in from outside. Rain that enters through a hole in the roof is covered; water that spills over from the street and fills a basement is not. Even with the same storm, the outcome differs depending on how the water got in.
Flood Insurance Is a Separate Policy
To protect against flooding, you must buy a separate policy, either through the National Flood Insurance Program (NFIP), run by the Federal Emergency Management Agency (FEMA), or through private flood insurance. The NFIP is sold through 48 insurance companies and thousands of independent agents. Coverage is mandatory if your neighborhood is designated a Special Flood Hazard Area (SFHA) and you have a federally backed mortgage, but anyone can buy it, including outside those areas.
The 30-day waiting period is the rule people most often run into. Buying a policy in a rush after seeing a storm forecast will not help for that storm. That is why now, after hurricane season has ended, is actually the right time to buy. There are two exceptions. If you buy a policy during the mortgage process when purchasing a home, coverage takes effect immediately, and if you buy within 13 months after your neighborhood is newly designated high-risk, the waiting period is reduced to one day.
Renters are not exempt from the risk. The building is the landlord's responsibility, but the furniture, appliances and clothing inside belong to the tenant. Policies covering belongings only are available, and the premiums are much lower than for coverage that includes the building. Korean American renters who live in a basement or on the first floor may want to get a quote.
What to Do if Your Home Was Damaged
If water has already come in, there is an order to follow. Take photos and video before cleaning up. It is important to record how high the water rose while marks remain on the walls. Make a list of discarded items and, if possible, gather receipts or purchase records. Then file a claim with your insurer and start drying out the space before mold spreads.
Even if you have no insurance and cannot receive a payout, you can apply for FEMA Individual Assistance or low-interest loans from the Small Business Administration (SBA) if a federal disaster declaration is issued. However, this aid does not come close to replacing insurance payouts. In the end, the only option is to buy coverage ahead of time.
One more thing. The NFIP operates on extensions granted by Congress, and its current authorization deadline is Dec. 11. If the deadline passes and the program lapses, new policies and renewals are blocked. Existing policies remain valid until they expire, and claims will still be paid. If you plan to buy coverage, it is better to act before then.