Who pays for flood damage?

Middle Tennessee has seen massive amounts of rainfall this winter and spring which has led to flooding issues across the area. 

As an example, Davidson County was recently hit with more than seven inches of rainfall, which resulted in the Nashville Fire Department have to rescue at least 130 people from vehicles, apartments and houses. The amount of property damage is still being determined.

However, once the flood damage has been assessed, the question becomes who pays to repair and rebuild homes and businesses. Insurance professionals in the state have been warning that the majority of homeowners in Middle Tennessee are not carrying flood insurance, which means they will be on the hook for the cost of repairs. Many renters may find themselves similarly uninsured for flood damage. 

Flood damage not covered by homeowner insurance

A standard homeowners policy excludes all flood damage. In order to be protected from flood damage, a homeowner must be carrying a separate flood insurance policy. Flood insurance can be purchased from the National Flood Insurance Program (NFIP) or through  private insurance companies.

“Unfortunately, a lot of renters, a lot of homeowners assume that they are fully protected for all losses, but flood is always a separate coverage — it’s always a separate policy,” Mark Friedlander, spokesperson for the Insurance Information Institute, said in a recent Tennessean.com article.

According to the Insurance Information Institute, just 2% of Tennessee homeowners have flood insurance. This number is a bit better for the Nashville area where 4.2% of homeowners in in Davidson County carry NFIP policies. An additional 4.4% carry flood insurance in Williamson and Wilson counties.

“More than 95% of homeowners in the greater Nashville area do not have flood coverage,” Friedlander said. Nationally, about 85% of U.S. homeowners are not protected against flood damage, though about 90% of natural disasters in the country involve flooding. “As we just saw in Nashville, flooding can occur just about any place, any time,” Friedlander said in the Tennessean.com article.

Flood insurance policies via the NFIP come with coverage caps of $250,000 for damage to the structure and $100,000 for contents of the home.

Renters need flood insurance as well

While landlords are responsible for flood damage to the physical structure of the building and unit, a renter’s personal possessions are not covered. Unfortunately, a standard renters policy excludes damage from flooding. 

In order for their possessions to be fully covered a renter will need to carry a separate flood insurance policy which can be purchased from the NFIP or private insurance companies. A renter’s NFIP policies cover only the contents of the covered home up to $100,000.

FEMA may help

It is possible that FEMA will step in to offer some help to homeowners or renters who suffered flood damage but don’t have flood insurance.

“Typically, in a disaster of this magnitude, FEMA funds will be approved for emergency usage in the community, but what we tell people is, don’t rely on FEMA to cover your losses,” Friedlander said in the Tennessean.com article. “You might get a small percentage of what you lost, but FEMA funds typically are not going to make you whole.”

Tips for dealing with flood damage

Here are a few tips for dealing with flood damage and your insurance company:

• Contact your insurer: If your home was damaged by flooding, you should notify your insurer as soon as possible so they can determine if the damage is covered. 
• Document the damage: As soon as it is safe, document the damage to your home. Take photos and videos of all of the damage to your home and possessions. 
• Keep notes and receipts: Keep detailed notes on your interactions with your insurance company. Note the name of the person you spoke with as well their title. Write up a brief synopsis of the phone call. Keep receipts and any documentation of out-of-pocket expenses related to the damage.
• Prevent further damage: If your roof, windows, doors or other parts of your home are exposed to the elements, make temporary repairs as soon as it is safe.