In this written article, we will discuss flood insurance and water backup and their differences. We hope this article could help you understand more about Water Backup Coverage and Flood Insurance in Denver, Colorado (or any other US state for that matter); and could also help you decide to get insurance for each.
Flood insurance is more than just coverage of a standard homeowners insurance policy and this safeguards you from more serious kinds of water damage such as heavy rain, melting snow, and serious coastal storms. Water is indeed fun in pools and water slides. However, water can cause so much damage to your home too. If you’re required to purchase flood insurance or you just would like to add protection for your property, we’re here to help you out.
What is a Flood?
According to the National Flood Insurance Program, a flood is a general and not a permanent condition wherein two or more acres of naturally dry land or two or more properties are submerged in water or mudflow.
What does Flood Insurance cover? What isn’t covered?
Flood insurance has coverage for both the structure of the home and also the personal property in case the home is damaged. The foundation of your home and also personal belongings unless they’re in the basement are all covered.
So, you ask what about the basement?
Apparently, there is only limited coverage in the basement of your house. Certain items inside your home that used to service the whole residence are covered such as water heaters, furnaces, washers, and dryers. However, carpeting and wall finishing are not really covered nor your personal properties.
Safeguard yourself from the losses that accompany this very common disaster
About 90% of all the natural disasters that are happening in the country involve flooding. Flood damage often targets low or moderate-risk areas. Kindly take note that homeowners insurance policies don’t really cover flooding. So, we greatly suggest that whatever your risk level in your area, you should also learn about flood insurance policies.
The risk of flood damage or loss
As stated by the Federal Emergency Management Agency or FEMA, floods including inland flooding, flash floods, and flooding from seasonal storms happen in every region and state in the United States.
We greatly suggest that if you’re moving into a new home, apartment, or business location, you should ask your mortgage lender, your local officials, or your insurance consultant if the location you’re choosing has been involved in flooding. The National Flood Insurance Program can also help you with your concerns.
You’re also at risk and in some danger of loss from a flood even though you don’t live in a high flood risk area since 20% of all flood claims are under low to moderate flood risks. You should be prepared for the possibility of flooding and be also aware of your flood insurance options and acquire enough knowledge.
Flood insurance basics
Insuring yourself against floods is a bit different than other insurance policies.
- Keep in mind that floods are not covered under homeowners and renters insurance policies. Only a distinct flood insurance policy will cover home flood-related losses.
- Almost all flood insurance policies are given through the U.S. federal government. Businesses, homeowners, and renters can buy flood policies from an insurance company under a written contract with FEMA. You can get federal flood insurance where the local government has adopted enough and sturdy floodplain management regulations under the NFIP and if many communities also participate in the program.
- If you opt for flood insurance, this covers direct physical losses from floods and losses resulting from flood-related erosion due to waves or currents of water that is brought by a serious storm, flash flood, and abnormal tide surge or in any same situation that results in flooding.
- Also, take note that insurance coverage for the house’s structure and valuables inside the home should be separately purchased. Buildings are usually covered for replacement cost. However, coverage for the property is only available on an actual cash value basis only.
Do I need flood insurance?
Flood insurance is definitely required if you’re located in an area that is at high risk for floods. In all honesty, floods can happen anywhere even if you don’t live in a highly prone area. Something that you should also consider is that most homeowners insurance policies don’t really cover flood damage.
Buying flood insurance
When purchasing flood insurance, you should know that:
You should purchase flood insurance before flood risk is approaching in your area since most flood insurance policies require a 30-day waiting period before the coverage applies. However, of course, exceptions include if you already bought a new home and the closing is in less than a month.
- It’s easy to buy flood insurance
Flood insurance policies from the federal government can be bought directly from an insurance company. Almost 100 insurance companies document and service NFIP policies.
- It, of course, requires a waiting period
As we have mentioned, there is a 30-day waiting period before a flood insurance policy takes charge so you should not wait until the last minute to buy it.
- It can be increased with extra insurance
The NFIP policy maximums are not enough to fully cover some people’s property so a growing number of private insurance companies have started also giving excess or extra flood policies that are intended to offer protection from water damage to homeowners policy above the coverage provided by the NFIP policies. Some insurance companies are also beginning to give “first dollar” flood policies.
If A Flood happens and I don’t have flood insurance, what happens?
- Obtaining a flood insurance policy is one way to protect your assets from the expenses of flood damages and loss.
- Relief from floods mainly comes in the form of loans if you don’t get insurance. No-interest or low-interest loans are usually given to those whose location is a declared disaster-prone. However, you must, of course, pay these back which means that you’re still responsible for the full cost of your damages or losses.
Flood Insurance And Flood Damage Pointers
To reiterate, most homeowners insurance policies do not offer flood insurance. However, it’s usually available as a separate policy. If that’s the case, how do you know if you need flood insurance and how can you safeguard your home from flood damage? We suggest following these tips to keep your home safe from possible water damages and that you have the exact insurance coverage you need.
- We suggest checking your own flood map or the elevation map of your neighborhood. You can ask for help from a local land surveyor or you could also call FEMA for help. This is specifically essential when you will purchase a home or property in coastal areas. If you are located in the 100-year floodplain, then you are at greater risk than normal for possible damages from the flood.
- There may be, of course, greater risk even if you don’t live near the coast. It is essential to take note that desert areas and very dry land cannot absorb water quickly. This is the same case with coastal areas and may result in more serious flash flood cases.
- Get flood insurance in advance. Do not wait for the moment that you already need it. Get it in advance since they have a waiting period of 30 days before it takes into effect.
- Avoid more disasters since some floods can cause damage indirectly. One instance is if floodwaters block the sewer system. This could overflow and back-up into your home. To avoid this, ensure that you have a backflow valve placed in your sewage system. Protection to counter sewer water backing up into the house can also be placed in your existing insurance policy and this is different from flood insurance. We will discuss this later.
- Of course, homes that are also situated in non-flood zones can also be damaged by floods. Based on findings, about 30% of flood damage happens in areas that are not considered high risk. It is essential to be aware of what a flood is and understand how to lessen it.
WATER BACKUP COVERAGE
We know that you can be so excited about purchasing your own home. This is both exciting as well as stressful at the same time. In reality, there are some things or instances that you never want to deal with as a homeowner of your own property. One instance is a fire or a tornado. Another instance is a loss due to water. More homeowner claims deal with some kind of water damage than any other claims related to the property. Some of the claims in insurance companies come from water backup which is also called water-sewer backup.
Water Backup Coverage: What is it and why is it important?
Water backup coverage is the overflow of any water from the ground up. In most cases, this is some kind of interior home drainage. This can be water coming from sump pump pits, toilets, sinks, floor, drains or crawlspace drains too.
Water damage can be, of course, disastrous to your own home or business. Not only is it disgusting if your basement is filled with brown water and sewage coming from a backed-up water main or other pipes, but it is also dangerous. can cost you thousands of dollars to fix this up.
Water backup coverage is optional and can be added to your existing homeowners’ policy for this kind of situation. We suggest learning more about this important optional coverage since many homeowners’ policies don’t cover water backups or only have limited protection. You don’t want to be, of course, underinsured after you have experienced a water backup issue.
What is covered by Water Backup Insurance?
A basic water or sewer backup coverage endorsement reimburses you for damage caused by water to the structure of your home, business, or personal property if it’s discharged water or the water overflows from the following:
- A sewer or drain
- A sump, sump pump, or other related equipment even if the discharge or overflow occurred because of mechanical issues
- Any kind of system designed to remove subsurface water from the foundation area
What isn’t covered by water backup insurance coverage?
There are, of course, several exclusions to be aware of with this kind of insurance. Kindly take note that this won’t pay to repair or replace a broken sump pump. You will need equipment breakdown coverage for such. Besides, it also doesn’t cover water damage that results from flooding, surface water, waves, tsunamis, tidal water, or overflow of any kind of body of water including your own pool.
Water backup insurance coverage won’t also cover overflow or backups that was attained by routine maintenance issues or due to negligence. An example is if the water damage was caused by a broken sump pump or forgetting to turn one on. Your insurance company may, of course, not heed your claim.
The level of coverage you need will depend on some factors:
- Whether your basement is finished or unfinished.
- The size of your basement
- The type of basement flooring that you have (carpet, vinyl, hardwood, etc.)
- The type of wall material that you have in your home (i.e drywall, paneling, and more)
- Whether your basement has a bathroom
- If you have a heating and cooling system in your basement, as well as a washer-dryer
How does water backup happen?
Water backup comes into place when a sump pump burns up during use or cannot when it cannot keep up with the amount of water that is running into the drainage. The water usually only has one place to go. Where else would it be? It overflows in your own home. This instance is not the only situation that can happen. One more example is when your child throws a solid item into a sink or toilet causing a backup of water. There are also moments when plumbing is clogged over time without the owner knowing anything about it. This could also lead to water backup.
General tips in regards to water backup
- Water backup is not usually included in a basic homeowner’s policy – Water backup should be endorsed for the insurance coverage to apply.
- Water backup insurance coverage is not the same as flood insurance – Flood insurance covers water damage from water coming outside into the dwelling. This is usually caused by flash flooding, flooding from heavy rains, rivers coming out of the banks from too much rainfall and flows, and from general bodies of water coming out of their banks from also too much water flows and rains. Water backup insurance coverage is not exclusive for homes with a basement.
You still need to take these cases seriously even though you don’t have a basement. If you have toilets, sinks, and even crawl space drainage pumps, you seriously need to think about buying this insurance coverage. Water mitigation cleanup bills can be as expensive as $7,500 for crawl spaces. This can happen to anyone.
We suggest following these preventative measures to help limit the damages:
- We suggest installing a better backup system for your sump pumps.
These can be bought for less than $500 and can give you enough protection.
- We also suggest installing a backflow preventer.
This is an easy one-way plumbing fixture that doesn’t allow water to flow back into your drain. The water can only flow in one direction. If the water flows in the opposite direction, the fixture will automatically close and will not allow water to pass through it.
- Adding a secondary sump pit or pump to your drainage systems will also be a good idea.
Sump pumps will only wear out when they are being used. It is usually during heavy use. For more protection, but the second pump on its own electrical breaker or outlet and its own drainage pipe.
- We also suggest installing a whole home generator.
This can be helpful for you. However, this is the most expensive option. It can cost more but it has many benefits for you, the homeowner. It can help with water back up as well as giving power to your lights, freezers, and heating and cooling systems. Your life will be uninterrupted if you install a generator since it can provide you electricity when a blackout happens. We also suggest adding a water intrusion alarm.
These can be purchased for less than $100 per year. They can be checked 24/7 with a central reporting company and also a phone app. You can also get high-end control alarms that detect excess water use and can automatically shut off the main water supply. We suggest contacting your local plumber if you want these installed in your homes.
- If you create your new home, check if an exterior sump pit and drainage has been installed into the new home.
This can cost up to $750 just to install this feature. This is a large diameter tile with an inspection port at the very top. There can be a high flow sewage pump that connects to the exterior foundation tiles to your storm sewer or outlet tile.
Water from the outside wouldn’t be routed back anymore into the dwelling. This feature can help keep all of the outside water stay on the outside of your dwelling. This is a must-have if you are constructing a new building or a house.
FLOOD INSURANCE VS. WATER BACKUP COVERAGE
Water / Sewer Backup Coverage
For homeowners insurance policies, they usually come with an endorsement for water backup and sump discharge which will cover losses up to a specific limit that is caused by water backup or other materials that went through the sewer or through a drain. This will also cover water or waterborne material that comes from a sump even though the backup of water is due to the mechanical damage of the sump pump. The insurance coverage includes property damage. However, it excludes damage to the sump pump and any other related equipment that has been destroyed.
The endorsement for water or sewer backup coverage does not cover damages caused by a flood. You need to buy a separate insurance policy for this.
What is considered a flood?
Again, to reiterate, according to the National Flood Insurance Program or NFIP, a flood is a general and temporary condition where two or more acres of dry land or two or more properties are submerged in water or mudflow.
Flooding can happen anywhere even in low-risk areas. Certain areas are also prone to serious flooding. Flood maps have been made to help communities understand their risk and to show the locations prone to different levels of risk. Here are some of the level of risks and their definitions:
Also known as Special Flood Hazard Areas (SFHA), there is at least one in four chance of flooding high-risk areas within a 30-year mortgage. All people who own personal properties like homes and businesses in these areas with mortgages from federally regulated or insured lenders are required to purchase flood insurance.
Moderate to Low-Risk Areas
In this level, also knowns as Non-Special Flood Hazard Areas (NSFA), the risk of having floods is reduced but not completely removed. People in these areas submit over 20% of NFIP claims and receive one-third of disaster assistance for flooding. Flood insurance is not really required at this level. However, it is recommended for all property owners and renters.
Undetermined Risk Areas
In this level, undetermined risk areas, no flood-hazard analysis has been made in these areas. However, of course, a flood risk still exists. Rates for flood insurance reflect the uncertainty of the flood risk.
Ask us any questions
We hope that this written article about flood insurance and water backup has helped you understand both and their differences. If you have any questions or clarifications in mind, please don’t hesitate to contact and talk to us. You may chat with us through the pop-up on the lower right side of your screen. Our contact information is also found on this website. Please also don’t hesitate to check more of our writings about insurance and we hope these articles can help you out. Have a great day ahead!