Explaining the Exclusions of Flood Insurance to Clients?

Many homeowners mistakenly believe that their home insurance policy automatically covers flooding. As any home insurance provider knows, this isn’t the case. Floods are frequently excluded from property insurance policies such as home insurance and can be added as an endorsement. 

There are limits even on a flood insurance policy, however, and it’s important for clients to understand the distinction between floods that are covered and floods that are not. 

Sewer Backup 

Pipe bursts and sewer backups can cause a ton of water damage, but this damage unfortunately isn’t covered by flood insurance. However, if the sewer backup is directly caused by a flood, damage can be covered. 

Just like with other property policies, flood insurance does not cover damage that occurs due to negligence. In other words, if a homeowner fails to maintain upkeep on their pipes and one bursts, causing damage to the home, the damage will not be covered under flood insurance. 

Personal Belongings Limitations 

Certain items may have little to no coverage under flood insurance As with home insurance personal belongings coverage, flood insurance excludes certain items. Art, furs, jewelry and electronics have limited coverage under flood insurance. On average, coverage for artwork and furs caps at $2,500. Flood insurance also does not cover paper money. 

Moisture, Mildew and Mold 

Whether caused by a flood or not, it’s likely a claim concerning moisture, milder or mold damage will be denied. This is because damage by these incidents can typically be avoided by proactive actions by the property owner. Claims can be denied even if mold or mildew is caused by a flood if it’s decided that the damage could have been prevented. 

Moisture often causes issues in tropical areas and states, such as Florida and other coastal states. Homeowners should understand that damage due to a moist atmosphere will not be covered under their flood insurance policy, so they should work to take preventive measures to avoid damage caused by their area’s atmosphere. 

Earth Movement 

Damage to the home from movements in the earth, even if caused directly by a flood, will not be covered under flood insurance. Earthquakes and sinkholes, for example, are not covered under flood insurance. 

Plants and Landscaping 

This cost varies depending on the state, location within the state, value of the home, claims history, credit score and other factors. 

Some homes won’t necessarily need flood insurance. Any home in a relatively tropical area with a history of floods, however, should at least consider purchasing flood insurance. 

Advise Preventing Flood Damage 

Even for those clients who don’t want flood insurance, you should advise them to safeguard their home against possible floods by landscaping with care, cleaning out gutters regularly and keeping up maintenance on the home’s siding and systems.