As the snow thaws and the spring rains commence, the threat of flooding and water damage rears its ugly face again. Many property owners, both commercial and personal, have some sort of flood coverage in place, but what exactly does a flood policy cover?
Before I address where your flood coverage may be falling short, it might help to define what a “flood” actually is. FEMA defines a flood as …
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 (at least one of which is the policyholder's property) from:
- Overflow of inland or tidal waters; or
- Unusual and rapid accumulation or runoff of surface waters from any source; or
Although this definition seems comprehensive, there are some water damage scenarios that fall outside of this criteria. More importantly, if a water damage loss falls outside of the definition of a flood then there is a good chance it will also be excluded by your property policy.
Here are some of the most common causes of water damage that you may not have coverage for even if you have a flood policy in place:
A hard rain falls all afternoon, but luckily there is no official flooding in the area. You look outside to assess the situation and see that the slope of your driveway is channeling a steady stream of water towards your basement. You run downstairs to see what can be done, but it’s too late, the water has already caused extensive damage.
This is an example of how surface water can cause water damage while still falling outside of the definition of a flood. Runoff of surface water is mentioned in FEMA’s guidelines, but in this case the inundation requirement was not met.
You notice a faint but unpleasant odor permeating your business. Using your trusty nose as a guide, you make your way to the basement and find a few inches of standing water covering the entire floor. Any stock on the floor is ruined and you still have to deal with the smell that tipped you off in the first place.
In this scenario the claims adjuster finds that the source of the water was backup caused by a blocked sewer pipe. Even if backup was covered by your flood policy, it would still need to be caused by a flood. A blockage of a drain does not trigger the flood policy and you could be left with severely limited or no coverage at all under your property policy.
After a long winter season, the frigid cold finally breaks and milder temperatures take over. Between the melting snow banks and seasonal rain, parts of your yard are temporarily turned into a muddy pit, but it’s like that every spring so you don’t pay it any mind. A month or so later you notice some serious cracks in your foundation that weren’t there last year. A contractor examines the situation and informs you that the cracking was caused by a buildup of water pressure along the foundation.
When we think of water damage most of us focus on the destruction caused by things just getting wet, so it’s understandable that many people overlook just how powerful water pressure can be. Hydrostatic pressure is the force caused by standing water, in this case the oversaturated soil next to the home. Losses caused by the weight of water or ice are often excluded from both flood and property policies.
Water causes some of the most devastating property losses for homes and businesses. I hope these examples illustrate the importance of reviewing your flood and property policies for gaps in coverage that have gone unnoticed. The Commercial and Personal Lines Consultants at Hausmann-Johnson Insurance have the expertise required to do a thorough review of your policies and put in place a comprehensive insurance package that will leave you with peace of mind.