Taking these immediate actions can help homeowners recover efficiently after a flood, ensuring safety, securing necessary resources and expediting the insurance claims process.
Understanding the claims process
Navigating the flood insurance claims process can feel overwhelming, especially in the aftermath of a disaster. Understanding the key steps, documentation requirements and the role of adjusters can help policyholders streamline their claims and expedite financial recovery.
Step 1: File notice of loss. Notify the insurer immediately after the flood.
Step 2: Adjuster inspection (24-48 hours). The adjuster assesses damage and policy coverage.
Step 3: Submit required documents. Essential documents include:
- Flood insurance declaration page
- Proof of loss statements
- Photos/videos of damage
- An itemized inventory of losses
- Receipts for repairs and temporary housing
- Proof of ownership
Step 4: Documentation review. The insurer evaluates submitted documents and claim details.
Step 5: Settlement and payout. Approved claims receive compensation based on policy coverage.
Insurance as part of preparedness: Why homeowners and renters need flood insurance
Standard homeowners' insurance excludes flood damage, leaving property owners vulnerable to financial loss. To protect against this risk, homeowners can purchase flood insurance, which covers structural damage and personal belongings.
Renters, on the other hand, don't have homeowners' insurance but can obtain renters' insurance. However, standard renters' insurance doesn't cover flood damage. To protect their belongings, renters need a separate flood insurance policy, such as one offered through NFIP or private insurers. Additionally, some policies may include coverage for temporary housing costs if they're displaced. With rising flood risks, securing the right type of flood insurance is a key step in risk management.
Other kinds of flooding
Beyond natural disasters, other scenarios can lead to flooding, according to Richard Gutierrez, senior claims advocate. "For instance, a catastrophic water release from a broken water main can cause flooding if it enters your home. However, your homeowner's insurance policy typically doesn't cover this type of flooding," he explains.
"Water damage caused by a plumbing issue, such as a burst pipe or a leaking water heater, is typically covered by standard home insurance policies. This coverage applies if the damage is sudden and accidental, rather than due to neglect or gradual wear and tear. However, it's important to note that this is different from flood damage, which requires separate flood insurance."
Gutierrez adds, "Many people mistakenly believe that isolated water intrusion events, such as sewer backups, are considered flooding. However, unless a flood directly causes the sewer backup, the two are not connected. Some homeowners' insurance policies offer optional sewer backup coverage, which can be an important add-on for additional protection."
NFIP vs private flood insurance: Which is right for you?
A common misconception is that homeowners outside of SFHAs don't need flood insurance or are ineligible for coverage. Flooding can occur anywhere, and many properties in moderate to low-risk areas, such as FEMA Zone X, may still be vulnerable.
NFIP
The NFIP, managed by FEMA, is the primary source of flood insurance in the US and offers standardized coverage for residential and commercial properties in participating communities.
NFIP has the following coverage limits, coverages and exclusions:
- $250,000 for residential building structures
- $100,000 for personal property. 7
- 30-day waiting period before an NFIP policy takes effect, except for new home purchases or policy renewals tied to certain loan requirements. 8
- Structural damage
- Essential systems
- Personal property
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- Additional living expenses
- Basement improvements
- Other losses that may be significant during a flood event
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Private flood insurance
Private flood insurance is an alternative to NFIP policies and offers more flexibility for coverage and policy customization. Private insurers are expanding their offerings to meet growing demand. Key advantages of private flood insurance include:
Higher coverage limits: Many private insurers offer coverage limits well beyond the NFIP cap, making them a better option for high-value homes and properties. 9
Additional coverages: Unlike NFIP, private policies offer expanded coverage, including temporary housing costs, basement-stored personal property and detached structures. Private flood insurance offers broader protection for flood-damaged furniture, clothing, electronics and appliances throughout the home.
Shorter waiting periods: Some private insurers provide coverage with waiting periods as short as 10-14 days, or even immediate coverage in some cases. 10
Customized risk assessment: Private insurers use advanced risk modeling to assess flood exposure, which may result in more competitive pricing and tailored coverage options.
The need for insurance advisors
Flood insurance needs to be viewed as a fundamental component of financial preparedness rather than an optional add-on. Selecting the right option depends on individual coverage needs, property value and risk exposure. Consulting with an insurance advisor can help homeowners and renters determine the best fit for their specific circumstances.
Gallagher's insurance advisors can offer expert guidance to ensure you have the right coverage in place. Our consultants can guide you through:
- Risk assessment
- Tailored coverage
- Policy language
- Claims support
- Dispute resolution
- Recovery assistance
Contact our insurance advisors for a personalized flood risk assessment.
For policyholders seeking further guidance, Gallagher provides dedicated claims support and contact information at AJG Home and Property Insurance Claims Contacts.
