Flood vs. Water Damage

Two insurance policies deal with a homeowner’s damage due to water — a flood insurance policy and a homeowners insurance policy. Losses not covered by one of these policies may be covered by the other. Knowing the losses to which your home could be exposed will help you decide whether to buy one or both insurance coverage.

While insurance policies may differ in the coverage provided from homeowner to homeowner, basic features are often standard to all policies.

FLOOD INSURANCE
As the name implies, a standard flood insurance policy, which the National Flood Insurance Program writes, provides coverage up to the policy limit for damage caused by flood. The dictionary defines “flood” as the rising and overflowing of a body of water onto normally dry land. For insurance purposes, the word “rising” in this definition is the key to distinguishing flood damage from water damage. Generally, damage caused by water on the ground at some point before damaging your home is considered flood damage. A handful of examples of flood damage include:

• A nearby river overflows its banks and washes into your home.
• Heavy rain seeps into your basement because the soil can’t absorb the water quickly enough.
• A heavy rain or flash flood causes the hill behind your house to collapse into a mud slide that oozes into your home.

Flood damage to your home can be insured only with a flood insurance policy — no other insurance will cover flood damage. Contact your county planning office to determine if your home is in a flood plain. Flood insurance may be an excellent purchase if you live in a flood plain.

HOMEOWNERS INSURANCE
A homeowners insurance policy doesn’t cover flood damage, but it does cover many types of water damage to your home. Just the opposite of flood damage, for insurance purposes, water damage is considered to occur when water damages your home before the water comes in contact with the ground. A few examples of water damage include:

• A hailstorm smashes your window, permitting hail and rain-free access into your home.
• Heavy rain soaks through the roof, allowing water to drip through your attic or ceiling.
• A broken water pipe spews water into your home.

Even if your homeowner’s insurance policy does not cover flood or water damage, losses from theft, fire, or explosion resulting from water damage are covered. For example, if a nearby creek overflows and floods your home, and looters steal some of your furnishings after you evacuate, the theft would be covered by your homeowner’s insurance because it directly results from the water damage. However, the flood damage would be covered only if you have flood insurance.

It’s important to note that flood and homeowners insurance do not duplicate coverage for water damage. Instead, they complement each other.