What Does Flood Insurance Not Cover?

Flood insurance offers a crucial layer of financial protection against the widespread devastation floods can inflict on properties. While standard homeowners insurance policies typically do not cover flood damage, a separate flood insurance policy is designed to address losses directly caused by flooding.

Water Damage Not Defined as Flood

Flood insurance policies specifically cover damage stemming from a “flood,” which is precisely defined 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, with at least one being the policyholder’s property. The source of this water typically includes overflow of inland or tidal waters, unusual and rapid accumulation or runoff of surface waters from any source, or mudflow.

Damage originating from within the home, such as a burst pipe, a leaky appliance, or an overflowing toilet, is not covered by flood insurance and is usually covered by a standard homeowners insurance policy. Similarly, groundwater seepage or hydrostatic pressure is typically excluded unless it occurs as part of a larger, defined flood event. Sewer backups or drain overflows are only covered by flood insurance if the backup is a direct result of a general flood event, such as floodwaters entering the sewer system. If the backup is due to a clogged pipe or other internal plumbing issue, it is not covered by flood insurance.

Property and Structural Exclusions

Flood insurance policies often contain specific exclusions for certain types of property or structural elements, regardless of the cause of the flood. Items located outside the insured building are generally not covered, including trees, shrubs, plants, driveways, walkways, patios, decks, fences, and septic systems. Swimming pools and hot tubs are also typically excluded from coverage.

Detached structures on a property, such as sheds or guest houses, are usually not covered by a flood insurance policy unless they are a detached garage or specifically endorsed. Detached garages may receive limited coverage, often up to 10% of the main building’s coverage limit, provided they are used for parking or storage and not for residential purposes. Other detached buildings generally require a separate policy to be insured against flood damage.

Coverage for basements and crawl spaces is particularly limited under flood insurance policies. While essential structural elements like foundation walls, unpainted drywall, and utility systems such as furnaces, water heaters, electrical, and plumbing are typically covered, many other items are excluded. Excluded items commonly found in basements include finished walls, floors, carpets, and most personal property like furniture, electronics, or recreational items. Personal property in basements is not covered, even if contents coverage is purchased, unless it is an essential appliance connected to a power source, such as a washer, dryer, or food freezer.

Flood insurance does not cover damage to vehicles, including cars, boats, or other self-propelled vehicles. Coverage for vehicle damage due to flooding typically falls under the comprehensive portion of an auto insurance policy.

Financial and Specific Content Exclusions

Flood insurance policies exclude coverage for certain financial losses and specific high-value items. One significant exclusion is for additional living expenses, which are costs incurred if a property becomes uninhabitable due to flood damage, such as hotel stays or temporary housing. While some private flood insurance policies may offer this coverage, it is not typically included in standard policies, such as those through the National Flood Insurance Program (NFIP).

Flood insurance does not cover business interruption losses, meaning the loss of income or operational costs a business incurs if it cannot operate due to flood damage. Businesses needing this type of protection typically require a separate business interruption insurance policy or an excess flood insurance policy that includes such provisions.

Highly valuable items and certain documents are excluded from flood insurance coverage. This includes cash, precious metals, valuable papers, currency, and stock certificates. Property owners are advised to secure these items in a safe, waterproof location, such as a safety deposit box, to protect them from flood damage. Personal property located in a building other than the insured dwelling is typically excluded unless specific endorsements are purchased or a separate policy is in place.

Preventable Damage and Maintenance Exclusions

Flood insurance policies exclude damage that could have been prevented or is related to land movement not directly caused by a flood event. Mold and mildew damage is not covered if it resulted from conditions that the property owner could have prevented or if it is not a direct and unavoidable consequence of covered flood damage. Policies expect property owners to take reasonable measures to mitigate such issues following a flood.

Damage resulting from land movement, such as landslides, mudslides, or erosion, is typically excluded unless it is a direct result of a flood, meaning the rising or overflowing of water causes the land to move. Mudflow, defined as a river of liquid and flowing mud on normally dry land, can be covered if it meets the flood definition. Other forms of earth movement are not covered by flood insurance.

Flood insurance does not cover damage that arises from the property owner’s neglect or failure to maintain the property. This includes damage from pre-existing conditions or a failure to take reasonable steps to protect the property from damage. Policies are designed to cover sudden and accidental damage from a flood, not issues stemming from a lack of routine upkeep or deferred maintenance.