Flood Insurance Vs. Sewer Backup Coverage, Are you covered??

5/18/2017 (Permalink)

Flood insurance and sewer backup insurance are not the same thing, nor are they included in your standard homeowner’s policy. It is important to understand the difference between the two, whether you have them, and if you need one or the other… or both!

Floods are the most devastating natural disaster in the US each year causing billions in losses and displacing thousands. While flooding is a common concern for those near rivers and streams, all homes in the US can be caught off-guard by floods. Floods are defined as surface water that enters your home for the outside. A flood can be caused by spring run-off, melting snow, an overflowing river, lake or stream, or even a swimming pool. Excessive groundwater buildup that enters your home via leaks or seepage is also considered flooding.

Sewer back-ups occur when massive volumes of water overload a drainage system. Once the waste water rises above your basement drains, it pushes up into your home through not just those floor drains but your sinks, tubs and any other drainage outlet. Sewer back-up can be a smelly, filthy mess and can introduce black mold, harmful bacteria, and sewage waste into your home, creating health risks and extensive damage.

Both these events can be caused by heavy rainfall, and if you don’t have the proper coverage. you will be footing the bill for this. It is important to know what coverages you have. Based on where you live, one of these may not be logically for you to carry. Here are some facts flood insurance you should consider:

• All flood insurance policies are backed by the federal government, they set all rates.
• Flood insurance never covers contents in a basement. It only covers the basement’s foundation and drywall, it does not cover carpeting, paneling, or tile.
• Most flood insurance polices just cover the dwelling, in case the home is swept away in the flood.
• You can purchase flood insurance for the contents in the main floor, but it will increase your premium.
• Flood insurance will cover certain major appliances like furnaces, air conditioners, freezers, etc. but it will not cover stereos, televisions, furniture or other contents.
• Enter your address into FloodSmart.gov’s One Step Flood Risk Profile tool and the site will tell you how likely it is that your property will be flooded
• There’s a limit on government coverage.You can get upwards of $250,000 on the structure of your home, which in most parts of the U.S. is going to be enough.
• Flood insurance involves water coming into your home from rain, a river, a lake, or external source of water. Flood insurance does not cover water sewer backup, even though this may be caused by excessive rain water.

Sewer back-up coverage can be added as an endorsement to your homeowner’s policy. This endorsement covers physical loss to property covered by your policy if the loss is caused by a discharge of water or waterborne material from a sewer, drain or sump. For a loss to be covered, the sewer, drain or sump must be located on premises listed in the endorsement. Here are some facts to consider:

• Sewer back-ups are somewhat a common occurrence.
• The cost can vary, but the typical sewer backup endorsement will cost under $100.
• With sewer backup, you purchase specific amounts of coverage, i.e. $10,000; $15,000 or $20,000. This helps cover the cost of cleaning and mitigating the damage caused from the backup as well as replacing carpets, drywall, personal contents, even cleaning ducts.
• There are some exclusions to the endorsement, one being floods, as well as poor maintenance, power failure, nor will it cover the cost of repairing the sewer or drain.
• Metro Detroit residences should all carry sewer backup coverage, especially if they plan to finish their basement and keep a lot of stuff in there.

Understanding the difference between these two add-on coverage's in lieu of your homeowner’s policy is very important and can save you thousands of dollars if South Eastern Michigan experiences more of the epic rainfall that happened August 2014. If you have more questions or don’t know what coverage you do have, call your insurance agent and find out. Ask questions, be informed. SERVPRO of Oak Park/Ferndale had a lot of customers that found themselves coming out of pockets $30,000+ to repair their homes after that storm, we don’t want this to happen to you.