As rain and winds continue to batter California, homeowners are struggling with costly repairs. While standard home insurance policies typically cover rain damage, floods are a separate risk that requires special insurance.
But the number of Californians with flood insurance is very small – just 2% of homes have a policy through the government-sponsored National Flood Insurance Program. That could be changing, thanks to private companies that offer affordable coverage.
Coverage for Flood Damages
Homeowners, condo and renters policies usually exclude flood damage, so you’ll need to buy a separate policy if you live in an area at risk of flooding. The federal government subsidizes the bulk of flood insurance in the US through its National Flood Insurance Program, but private insurers also offer coverage. The flooding that ravaged California resulted from an atmospheric river, a large low-pressure system that produced record rain in parts of the state and caused flooding and mudslides. It’s estimated that 32 trillion gallons of water washed out roads, knocked out power and killed at least 21 people. While home and rental insurance won’t cover flood damage, some private companies offer a separate policy that will pay for items like furniture, appliances and clothing. Personal flood insurance California policies are often cheaper than those provided by the NFIP and may have more coverage options. NFIP policyholders are reimbursed for replacing damaged items on an “actual cash value” basis, which takes depreciation into account. In contrast, many private companies offer replacement cost coverage with a higher limit for the building and contents of a home.
Coverage for Water Damages
While some homeowners think their standard home or renters insurance covers water damage, they’re often wrong. Most policies exclude damage from flooding, so you’ll need a separate flood insurance policy to get the protection you need. Most people don’t have a flood policy, and even those who live in areas at risk of flooding typically don’t have one. FEMA’s statistics show that less than 2% of Californians have a federally sponsored National Flood Insurance Program (NFIP) policy. However, those who live in high-risk flood zones must have one as a stipulation of their mortgage loan. Those who don’t live in a flood zone should consider buying a private flood insurance policy. While these are more expensive than NFIP policies, they offer better coverage for the cost. You can compare personal and NFIP policies online to find the best deal for your needs using a service.
These services will take the information you provide about your property and compare it to policies from their network of insurers. They may have different waiting periods than NFIP, and some may have exclusions not found in government policies, such as those that don’t cover mudflows.
Coverage for Damages Caused by Sewage
Sewage backups are another common peril homeowners face, but they are usually excluded from standard home insurance policies. Clogged drains or sewer lines cause these backups, and they can result in water damage to your property. You can often get coverage for this damage by adding a service line endorsement to your policy. This coverage varies by policy but typically includes a $500 deductible and a coverage limit of $10,000 or $12,000. The types of items that are covered vary from insurer to insurer. For example, some policies will cover damage to your laundry machines, while others may only include the cost of repairing your sump pump.
The best time to purchase this coverage is before a problem occurs. Adding this coverage to your existing policy costs little and could save you thousands of dollars in damage repairs. Some providers offer a simple online process to submit an intake form with your details and coverage needs. Once you’ve filled out the form, they will ship your case to its network of private insurers. Once it finds a policy, you’ll be contacted by the insurer directly with details on how to file a claim. It provides a more affordable solution to the National Flood Insurance Program, which is typically only available to those living in high-risk areas with low incomes.
Coverage for Damages Caused by Damages Caused by Storms
As the floodwaters recede, California residents struggle to rebuild after heavy rain-soaked wildfire-charred hills and cities. Across the state, 32 trillion gallons of water flooded roads, knocked out power and caused massive mudslides in 41 counties. But despite the flooding, the vast majority of California homes and buildings are not insured against flood damage with standard homeowners or renters insurance policies. While a homeowner’s policy typically excludes flood damage, many insurers offer standalone flood policies that can cover both structural damage and the personal belongings that make up a home. A basic approach is often available for less than a dollar a month, and it can help homeowners and apartment tenants stay above water when disaster strikes. In the wake of recent flooding, more people seek private flood insurance rather than relying on the National Flood Insurance Program (NFIP), which offers building coverage. NFIP policies are based on FEMA maps, but the agency updated its pricing system in 2021 to better reflect true flood risk with a new formula called Risk Rating 2.0.
A private flood policy can be more affordable and come into effect much sooner than the 30-day waiting period for an NFIP policy.