Most homeowner’s insurance policies do not cover basement flooding. There normally is a separate rider that is added to your homeowner’s insurance that will cover some basement flooding. This normally ranges anywhere from $150-$200 extra per year for this coverage (money well-spent if you’ve ever experience a flooded basement). Some homeowners are required by FEMA to obtain flood insurance if their home is deemed to be in a flood zone. But if you are not in a flood zone, and you have a finished basement you need to have the extra rider for flooding added on to your homeowner’s. Be proactive, and contact your insurance agent soon to discuss exactly what is covered and what is not covered in this situation.
In order for any insurance loss to be covered, the occurrence must have been a sudden and accidental event. Flood insurance does not cover finished portions of a basement (walls, floors, ceilings and contents). For this coverage, you’ll need an additional rider. The average flood insurance premium is only about $370 a year (much easier to budget for than a $50,000 disaster home loan that costs about $310 a month*). Flood insurance coverage is available for a 1-year term. Flood insurance is sold by private insurance agents at set prices, depending on your proximity to a flood zone; you could pay more than $800 a year for $100,000 coverage if you're in a flood plain, or as little as $230 if you're in a low-risk area.
Remember to take pictures for your insurance claims.
Flood insurance only covers flood damage; it does not cover leakage or seepage in basements where there was no surface water. It does not cover water which enters your basement/cellar through the walls or floors from saturated ground. Flood insurance policy forms are available on the web at your insurance company web site.
Mold growth due to flooding must be thoroughly killed, because if it is not removed completely it will keep returning, and mold can cause health problems. Mold in basements and crawl spaces can easily grow into the floors and walls above. You can smell mold. Objects like rugs, draperies, and furniture may need to be taken out for deodorizing or to prevent any further mold growth. Mold damage is a potential threat to any building. Something you do not want to do is to replace woodwork or sheet rock, only to have mold grow back behind it.
Many people mistakenly believe that any damage to their home will be covered by insurance. Damage caused by mold, rust, corrosion, wet- or dry-rot, and condensation are always excluded under any property policy. Generally, the damage from a water pipe bursting would be covered on a homeowner’s claim (sudden and accidental), but dry-rot caused by a slow leak in a pipe would not be covered (maintenance issue).
Basement flooding is a potentially serious problem. Flooding in the spring from snow melt is a common occurrence in many parts of the country. Basement flooding may also occur because of a blocked connection between your home and the main sewer in the street; a back-up of wastewater in the sewer system (or a combination of wastewater and rainwater from the sanitary or combined sewer system); or failure of a sump pump (used to pump weeping tile water). Basement flooding problems are best diagnosed by working your way down from the eavestroughs and downspouts to the lot and foundation drainage, and then to the plumbing system — both inside your home and beyond its connection to the municipal sewer system.
Claims for damage should be submitted to your Insurance Office when specific, individual incidents result in over $500 in expenses. If you are thinking about buying flood insurance there is one important statistic to remember; almost 25% of all flood insurance claims came from areas not considered high risk.