Imagine rivers in the sky accumulating moisture and then dumping water all over us. Well, that’s exactly what is happening with the recent storms in California, which have caused flooding, mudslides, loss of life and damage to homes and belongings. Scientists are calling these storms “atmospheric rivers” and explain that they can carry up to 15 times the amount of water in the Mississippi River!
The third atmospheric river began rolling over California on January 6th and its destruction will cost homeowners, business owners and car owners thousands of dollars if they don’t have the right insurance.
As for the rest of the country, researchers say that atmospheric rivers are expected to grow 25% longer and 25% wider due to climate change. They will also roll through many parts of the country in the months ahead. While this trend is great for depleted water supplies, severe weather can wreak havoc on lives and assets.
Here’s everything you need to know, if you experience losses due to severe weather.
What You Need To Do Before the Next Flood
Consider what’s at stake, if there’s a severe flood in your house, condo, apartment or business. You’ll have to evacuate if it happens, but there’s no way to get your things out or to protect the structure itself. And what about your vehicle(s) and business property?
Make a checklist of all the things that may be destroyed due to severe weather.
- Home
- Personal belongings
- Car(s)
- Business property (including the building if you own it)
Using this checklist, create an inventory that includes each item that falls under each category. Get specific about each piece of personal property and its current value. Either save a video or photos of what you are documenting to a cloud software for safekeeping.
Next, create a checklist for each type of insurance you need, to protect the assets mentioned above, for most perils:
- Homeowners insurance
- Car insurance
- Commercial insurance
- Flood insurance for homeowners
- Flood insurance for renters
- Flood insurance for a business
Are you prepared to replace all that may get destroyed in a storm? You will be with these types of insurance.
At the very least, most people have car insurance and homeowners insurance, sometimes renters insurance. But what about flood insurance? Floods are becoming more common after severe rainstorms and snowstorms. Let’s see what it looks like to be prepared.
Car Insurance and Flooding
The only type of car insurance that will cover damages due to flooding is comprehensive coverage. Note that if the car is declared a total loss, you will only get what the car was worth just before the flood damaged it.
Usually, people buy both collision and comprehensive coverage together. It’s a really good idea to have both because in the case of heavy rains, you are more prone to accidents and flood damage.
You can raise your deductible on collision and comprehensive to make your monthly payments more manageable. The deductible is the amount you’re responsible to pay when you file a claim.
Home Insurance and Flooding
Live in a condo and just bought new floors? Well, if a flood washes away your floorboards or destroys your furniture and you don’t have flood insurance, your HOA’s master policy will probably not cover your losses.
If you own a house or have an existing mortgage on it, you need home insurance for the amount of money it takes to rebuild your home from square one and to replace all of your stuff – all of it! However, when it comes to flooding caused by severe weather, you’re fresh out of luck unless you have flood insurance.
If you run a business out of your home, you should be aware that a commercial flood policy will cover these contents, not a home flood policy. Make sure your carrier is aware that you have a home business so you have the right insurance policies in case the worst happens. There’s nothing worse than thinking you’re covered only to find out that you’re not.
Renters Insurance and Flooding
You need renters insurance to cover your bed, belongings, clothes and every piece of furniture and appliance that you own, but again, you won’t be covered in the case of a flood caused by an atmospheric river if you don’t have flood insurance.
Commercial Insurance and Flooding
If you own a commercial property, you’ll need commercial property insurance to protect your business equipment and furniture, even the building if you own it or are paying off a mortgage on it. However, if a flood takes place that destroys all you own, only flood insurance will cover your losses.
You’ll need commercial auto insurance for any business-related vehicles. Your commercial auto insurance will cover a flooded company vehicle. Your personal auto insurance policy will not cover a vehicle used for work purposes.
Do You Live or Are Planning to Live in a Flood Zone?
The Federal Emergency Management Agency (FEMA) assesses where flooding occurs and how frequently. Special Flood Hazard Areas (SHFA) are locations where residents are required to buy flood insurance. Pricing for flood insurance and requirements are based on where you live and if it’s a flood zone.
How Much Flood Insurance Do You Need?
Just as with homeowners insurance, you need enough flood insurance coverage to rebuild your home. Do not confuse that amount with the market value of the home. If you decide to not purchase and are hoping that FEMA may help you, note that they only offer emergency help, which is nowhere near enough to rebuild a home or replace all your possessions.
To calculate how much it will cost to rebuild your home, take into account the size of the home as well as the materials and labor needed to finish the project. Consider inflation, too, which has significantly raised costs for supplies and labor.
You’ll also need to consider how much your personal property is worth. Consider the fact that there are limits to individual items, like furs and fine China, which you will need to itemize separately from the lump sum for personal belongings. You can only ensure that you’re covered for your pricier items with a private policy that allows for endorsements, not with FEMA, which is a modest payout that helps to bail out residents temporarily immediately after a flood.
Coverage for Flooding FAQs
Is flood insurance required with a mortgage?
If you live in a flood zone, yes, it may be required by the lender. However, the new wave of severe storms has affected people who live outside of high-risk flood zones.
Will flood insurance cover the stuff that was destroyed in my car?
Depending on the carrier, the items inside your car may be covered by the flood insurance you have on your home because they fall under the category of personal property. Your commercial property insurance may cover items in a commercial-use vehicle.
Is flood insurance expensive?
The price of flood insurance for a home really depends on where you live and whether or not it is situated in a high-risk flood zone. Your premiums can be as low as $450 a year or as high as $3,800 or more a year.
Is comprehensive car insurance expensive?
Comprehensive car insurance coverage is, on average, less than $200 a year. How much you pay depends on the value of the car as well as where you live and whether you garage the car or park it on the street.
Key Takeaways
- Flood insurance on your home is necessary for you to recoup losses if a flood destroys your home and belongings.
- Flood insurance on a rental is necessary for you to recoup losses if a flood destroys your personal belongings.
- Comprehensive coverage on a personal-use vehicle and commercial auto insurance will cover you if your vehicle is damaged due to a flood.
- Your home’s flood policy will not cover your business equipment. To be covered, you must have a commercial flood policy.
The weather keeps getting more severe each year, so it’s wise to have the right insurance to protect yourself. As flooding becomes more common, even in areas that have not experienced a flood in decades, consider adding flood insurance to your home or renters policy as well as your commercial insurance policy if you own a business. To make sure you’re paying the lowest prices, shop around for the best rates for flood insurance, homeowners and renters insurance and commercial insurance.
Photo source: Depositphotos
