Many Phoenix, AZ residents are still reeling from storm damage caused by multiple heavy rainstorms during the first week of September, but some homeowners are realizing that their frustrations are just beginning. Contrary to popular belief, damage caused by flooding is often not covered by most insurance policies. And while a good rainstorm or two tends to remind homeowners about the importance of having both homeowner or renter and auto insurance, checking up on one’s insurance policies after a big storm occurs may result in some unpleasant surprises.
As Russ Wiles notes in a recent azcentral.com article, homeowners — like many Phoenix residents at the moment — don’t realize (or remember) that their insurance policies have complicated rules regarding water damage coverage. A spokesperson for a national insurance company is quoted in Wiles’s article that “There’s a huge knowledge gap among the public regarding flood insurance.” In other words, the homeowners policies offered by most insurance companiesdon’t cover damage caused by flooding, and insurance companies seem to be comfortable with citing the “huge knowledge gap” as the reason why so many homeowners will struggle to have damages covered.
Many auto insurance will cover damages to vehicles caused by flooding, even if the driver could have prevented the damage; in order to have residential flood damages covered, however, a homeowner has a buy a separate policy backed by the government. And even when a policy does cover certain types of water damage, the circumstances surrounding the damage will have to be analyzed by the company in order to determine how much damage will be covered — if any.
Additionally, merely filing multiple small claims, regardless of whether or not the insurer decides to accept the claims, could drive up a homeowner’s premium. The Arizona Department of Insurance released a press release, in response to the recent storms, urging homeowners to be aware that their insurance histories are evaluated regularly by the insurers, and the companies have a tendency to raise clients’ premiums if they see too many small claims being filed. The struggle, of course, is trying to determine whether or not a claim is big enough to warrant coverage.
“Depending on the type of flooding that occurs, some flooding is covered and some is not,” says Kenneth G. Fraine, P.E. from Drainage and Erosion. “If your sump pump breaks for example, in this event the flooding is covered. Generally speaking, those should get flood insurance if in a flood zone – for those not in a flood zone but at risk you should still get it and it’s relatively inexpensive.”
With all of the complications, it’s no wonder that so many homeowners are confused by their insurance policies. The bigger problem with water damage, though, is that repairing and replacing items after the fact can be extremely expensive. It’s better to prevent the damage beforehand, by ensuring that your home has a structurally sound roof and proper basement drainage or waterproofing.