Q&A; : Why Flood Losses Often Not Insured

Most homeowners and renters--even those who consider themselves fully insured--are not covered for flood damage, according to insurance industry executives.

Here are answers to commonly asked questions about storm-related insurance coverage:

Q: Why would my insurance not cover floods?

A: A standard homeowner’s or renter’s insurance policy does not cover flood or flood-related damage.

Flood insurance, which is available only through the Federal Insurance Administration, must be purchased separately from your insurance agent. These policies offer coverage of up to $185,000 in structural damage and $60,000 worth of damage to a home’s contents.

Rates depend on the area’s flood potential but, according to a nationwide average, $86,000 worth of structural coverage, carrying a $500 deductible, can be purchased for $300 per year.

However, before you rush down to your insurance agent, you should know that new policies cannot be issued in a storm-affected area until the immediate flood danger subsides.

According to the Federal Insurance Administration, less than 20% of the nation’s buildings at risk of flooding are insured against floods.

Locally, about 11,300 National Flood Insurance Program policies, with total coverage of $1.5 billion, have been issued for structures in northwest Los Angeles County, an area that includes most of the San Fernando Valley and the Malibu coastline.

In all of California, about 185,000 special flood insurance policies are in effect, with total coverage of $17.5 billion.

Q: Does my homeowner’s policy cover damage that the storm might cause to my house?

A: Yes. Although the standard policy does not cover what is known in the trade as “rising water” damage--problems caused by water that accumulates on the ground after falling from the sky. These policies usually cover damage caused by falling rainwater. You may consider this a technicality, but insurers don’t.

Here’s how it works:

Water from flooding levies, rivers or dam basins is considered “rising water” because it is rainwater that has collected on the ground before it damages your property. But if the storm blows a hole in your roof or knocks a tile off, and that damage lets rainwater seep in, the resulting water damage is covered by the standard homeowner’s policy.

Q: What about other storm-related damage?

A: In general--and you should check your policy and contact your agent to be sure--structural damage from fallen trees is covered. And other wind damage is usually covered.

However, most standard policies exclude damage resulting from earth movement, such as mud slides. Also, most policies do not cover leaky roof damage. The rule in this case is that unless a roof is damaged “externally” by the storm, damage to the contents of the structure is not covered.

Q: What about storm damage to cars and other vehicles?

A: Here’s some good news. Most comprehensive auto policies cover storm-related damage. Check your policy to be sure, but unless you carry only the minimum liability insurance required by the state, you are probably protected if your car is trapped in a flood or otherwise damaged in a storm. If you are financing the purchase of your car, you likely have comprehensive auto insurance, because most lenders require it.