2021 has brought record rainfall to the Metro Detroit area. In fact, the five year period of 2016-2021 is the 2nd wettest period on record for the Metro Detroit Area since data collection began. With this there have been multiple flash flood warnings, in 2021 alone. Because the Metro Detroit area has a high percentage of homes with basements, this has wreaked havoc in the area. With this we have seen a large number of homes with flooded basements.
So how is this covered by your homeowners insurance? Well there in lies the million dollar question! Unfortunately, the appropriate question is, “Does your homeowner’s insurance cover this?” When you contact your agent, his/her first question should be “How did the water get there?” We are trying to determine if the water is surface water (flood) or sub-surface water (water backup or maintenance issue).
Flood is specifically excluded from a homeowners policy and requires you to purchase a stand alone policy, if you want coverage for a flood event. Flood Insurance can be just as much as your homeowners policy, if not more depending on the Zone in which you are located. Most people think they only need Flood insurance if they are on the shore line. However, flooding can occur anywhere, whether along the shore, inland or at altitude. In simple terms, a flood is an excess of water on land that is normally dry, affecting two or more acres of land or two or more properties. Major events occur in every state in the US.
There are 4 causes of a flood.
- River or coastal flooding, such as spring runoff, raising river levels or hurricane driven rains and tidal surges.
- Rapid runoff or buildup of water, such as torrential rains in low lying areas.
- Mudflow in inundated, normally dry areas.
- Collapse of water retention structures such as levees or dams, or erosion of coastal or lakeside seawalls and shoreline.
Water Back up on the other hand, is an optional rider that can be added to any homeowner’s policy. The amount of coverage offered varies greatly depending on the carrier. Some will only offer up to $5,000 in coverage, where as others offer up to $50,000. Water back up is defined as damage to your home or personal property because of water that backups through sewers, drains, and discharges or overflows from a sump, sump pump, or related equipment.
Those with basements should certainly consider purchasing both a flood policy and the water back up endorsement. A report from the Great Lakes Integrated Sciences and Assessments found annual precipitation in the region has increased by 14% since 1951, with the greatest increase happening in the winters and springs. This especially concerning, because the hard ground in the Winter and early spring absorbs less water.
Another common issue, is that most with finished basements are underinsured. Many insurance carriers max out $10,000 and some do not cover your personal belongings. Most furnaces cost close to $10,000 and you also have to factor in the cost to dry everything out.
Have questions? Feel free to give us a call.