Flood Insurance: What Homeowners and Businesses Need to Know
Recent flooding in McCaysville and Copperhill has been a difficult reminder that serious flooding can happen in the mountains too. Even areas that may go decades without a major flood can experience damaging rainfall in a very short period of time.
For homeowners and business owners, one of the most important things to understand is that a standard homeowners policy generally does not cover flood damage. Flood insurance is separate coverage that should be considered before severe weather is on the way.
Flooding Can Happen in the Mountains (1:28)
It can be easy to assume that flooding is primarily a concern in coastal areas, but mountain communities are not immune.
Creeks, rivers, lakes, low-lying areas, and periods of extremely heavy rainfall can all create flood exposure. Flood zones are an important part of determining risk, but homeowners can still purchase flood insurance even when their property is not located in a designated high-risk flood zone.
Homeowners Insurance Does Not Normally Cover Flood (1:57)
One of the biggest misconceptions about homeowners insurance is that it automatically covers flooding.
Flood is generally excluded from a standard homeowners policy and requires separate flood insurance. In some cases, a mortgage lender may require the property owner to carry flood insurance, but homeowners can also choose to purchase it even when a lender does not require it.
For property owners near rivers, creeks, or other areas that could experience rising water, flood coverage is worth discussing with an insurance agent.
You Can’t Wait Until a Storm Is Coming (5:01)
Flood insurance needs to be planned for ahead of time.
In many situations, there is a 30-day waiting period before a new flood policy becomes effective. Certain exceptions can apply, including some situations involving a real estate closing or mortgage requirement.
That means waiting until a major storm is already in the forecast may be too late.
Flood Insurance Is Important for Businesses Too (5:45)
Flood coverage isn’t only something homeowners should consider.
Commercial property policies can also exclude flood, leaving businesses exposed to losses involving the building, inventory, equipment, furnishings, and other property.
Business owners located near waterways or other flood-prone areas should understand whether they currently have flood coverage and how much protection their policy provides.
Know Your Flood Insurance Limits (6:44)
Flood insurance also has coverage limits that property owners need to understand.
The National Flood Insurance Program allows residential coverage of up to $250,000 for the dwelling and $100,000 for contents. For commercial properties, coverage may be available up to $500,000 for the building and $500,000 for contents.
For homes or businesses worth more than those limits, excess flood insurance may be available through private insurance companies to provide additional protection.
Having flood insurance is an important first step, but it’s also important to ask whether the amount of coverage would be enough after a major loss.
Your Auto Insurance May Cover Flood Damage (12:47)
Vehicles are handled differently from homes when it comes to flooding.
If an auto policy includes comprehensive coverage, sometimes called “other than collision,” flood damage to the vehicle may be covered. Comprehensive coverage can also apply to losses such as theft, fire, glass damage, and collisions with animals, depending on the policy.
If you have removed comprehensive coverage from an older vehicle, it’s worth understanding what protection you are giving up.
Mudslides and Earth Movement Can Be More Complicated (14:18)
Mountain properties can face another type of risk when heavy rain causes slope failure, mudslides, debris flow, falling rocks, or other earth movement.
These losses can fall under different exclusions than traditional flooding. Even having flood insurance or an earthquake endorsement does not necessarily mean every type of earth movement will be covered.
This is an area where homeowners should talk through the specific exposures surrounding their property rather than assuming a particular policy will respond.
Don’t Forget Detached Structures (18:29)
Flood coverage for another structure on your property may not automatically work the same way as coverage under your homeowners policy.
A detached garage or other building may need to be specifically addressed under flood coverage, and in some situations a separate policy or location may be required.
If you have multiple buildings on your property, make sure you know which structures are actually insured for flood.
Review Your Flood Risk Before You Need the Coverage
The recent flooding in McCaysville and Copperhill is another reminder that living in the mountains does not eliminate flood risk.
If your home or business is near a creek, river, lake, low-lying area, or anywhere heavy rainfall could create problems, now is a good time to ask about your options.
And if you already have flood insurance, review your limits, contents coverage, additional structures, and whether excess flood coverage should be considered.
Call Moore Insurance Services and let our team help you review your property, current coverage, and flood insurance options before the next storm arrives.
Insurance coverage varies by policy and carrier. All coverage is subject to the terms, conditions, limits, and exclusions of the actual policy issued. Contact a licensed insurance professional regarding your individual situation.