Blog/News Room

Why is flood coverage not included in homeowners insurance?


Why is flood coverage not included in homeowners insurance?

Between Hurricane Harvey and Hurricane Irma, there were over 95,000 paid losses reaching $8 billion in 2017. Many were shocked to learn that the flood damage to their home was not covered by their homeowners insurance and was left wondering “why?” The short answer? It’s a high risk.

Why Not?

There are areas of the country that are high risk flood zones. Homeowners living in those high risk areas are required to purchase a flood policy to obtain homeowners insurance. The risk and cost associated with flooding are high enough that if it was included in your typical homeowners policy, you could be paying through the roof for a premium you may not need. The average flood claim cost over the last year is $35,157, and that’s just one claim.

With floods being the most common natural disaster, it’s a high-cost risk for insurance carries. To offset that cost, a flood policy is its own coverage option for you to decide based on your home’s flood risk. Our advice? Don’t risk it. Don’t forget, home insurance policies will typically cover water damage if it is the result of another peril, but storm surge and overflowing streets, it’s almost always a resounding “no.”

What are my options?

You have two options: purchase flood insurance through an agent OR cross your fingers and hope the weather is calm this year. Most major insurance carriers offer separate flood policies for purchase. Your local, independent agent will also be able to help match you with the best flood coverage for your home. You can also call the National Flood Referral Call Center at 1-800-427-4661 for an agent referral.

The cost of your flood premium will factor in items such as the age of your home, it’s flood risk, and the location of the lowest floor in relation to the Base Flood Elevation on the flood map.

Key Takeaways

  • Floods are the most common natural disaster
  • Be aware of the area you live and its flood risks
  • Know what your policy does and doesn’t cover

Speak with your local Lighthouse agent to discuss our flood coverage.