Unknown Facts About Water Damage and Flood Insurance

Unknown Facts About Water Damage and Flood Insurance

April 13, 2023

Imagine coming home after a long day at work, only to find your basement flooded with water. Your precious belongings are ruined, and you're left with a costly mess to clean up. As a homeowner, you may wonder if your insurance will cover the damages. But do you have water damage insurance or flood insurance? Many people use these terms interchangeably, but they are not the same. Understanding the difference between water damage and flood insurance is crucial to ensure you have the right coverage for unexpected events. Let's explore this topic further by looking at a real-world example where the difference has affected a homeowner.

Water damage insurance typically covers damages caused by sudden and accidental water incidents within your home, such as burst pipes, leaks, or overflowing appliances. This coverage is usually included in most standard homeowner's insurance policies.

  • Water damage is the second most common type of home insurance claim in the United States, accounting for approximately 20% of all claims. (Insurance Information Institute)
  • The average cost of a water damage claim is $10,234. (Insurance Information Institute)
  • Plumbing-related issues, such as burst pipes and leaks, are the leading causes of water damage claims. (Insurance Information Institute)

On the other hand, flood insurance specifically covers damages caused by flooding, which is defined as the overflow of water from a natural source, such as a river, lake, or ocean, that affects two or more properties or at least two acres of land. Flood insurance is typically separate from a standard homeowner's insurance policy. It's important to note that flood insurance is regulated by the National Flood Insurance Program (NFIP) in the United States, and coverage limits and premiums are determined based on the property's flood risk. 

  • Floods are the most common and costly natural disasters in the United States. (Federal Emergency Management Agency)
  • Just one inch of water in a home can cause an estimated $25,000 in damages. (Federal Emergency Management Agency)
  • Approximately 20% of flood insurance claims come from properties outside of high-risk flood zones. (Federal Emergency Management Agency)

So, remember, when it comes to insurance, water damage and flood insurance are not the same. Make sure you have the right coverage to protect your home and belongings, especially if you live in an area prone to flooding.