FOR IMMEDIATE RELEASE: March 26, 2019
The Michigan Department of Insurance and Financial Services (DIFS) is encouraging all Michiganders to evaluate their homeowners insurance policies to understand their coverages for water damage before spring temperatures start to rise. Homeowners need to be aware that a homeowners insurance policy does not cover flood damage.
“As a property owner, you should read your policy and contact your insurance agent for help determining whether you are covered and to discuss specific coverage you may need,” explains DIFS Director Anita G. Fox.
Damage from flood waters can be significant. FEMA calculations show that just three inches of floodwater in a home could require replacing drywall, baseboards, carpets, furniture and other necessary repairs. If you don’t have flood insurance, your likely out-of-pocket cost (based on a 1500 square foot, one floor home) is estimated at approximately $15,000. For six inches of water, estimated losses jump to approximately $23,000. More than 20 percent of flood insurance claims come from outside high-risk areas.
A separate flood insurance policy, sold through the National Flood Insurance Program (NFIP), is available to residents living in participating communities to cover flood-related damages. Visit http://www.floodsmart.gov/ to learn more about flood insurance. Fox advises that “if you purchase flood insurance from the NFIP it is important to know that it doesn’t become effective until 30 days after you buy it.
Other water damage coverages in a standard homeowners insurance policy can also often be very limited.
Generally, water coming from the top down, such as burst fire sprinklers and ice dam seepage behind drywall, is covered by standard homeowners insurance policies. Water coming from the bottom up, such as foundation seepage from snowmelts, is usually not covered.
Damage caused by a sewer backup or sump pump overflow is also not covered by a typical homeowners insurance policy. This type of coverage can be added through a special endorsement to a policy. Property owners should contact their insurance agent to find out more about special endorsements and riders for expanded coverage.
Anyone with questions or concerns about their insurance coverage can call the DIFS toll-free hotline at 877-999-6442.