Floods and Insurance: Thoughts after Hurricane Ida

From the desk of Daryl Henry:

Hurricane Ida rolled through recently and my thoughts and prayers go out to all the people impacted in Louisiana.  The storm lost some of its energy as it rolled through the US, and while it was nothing like the storm that hit the coast, it was still a ferocious thunderstorm as it came through Frederick Maryland.  Torrential rain, howling wind, and thunderclaps ripped through the area.  Baker Park flooded.  I saw video footage of a park bench that was almost totally submerged in water, only the top of panel of the back of the bench poked its way through the surface of the water.

So is flood covered?  The answer is that it depends, and I wanted to talk through a couple of scenarios.

You have a flood policy on a building and/or the contents inside of a building.  If this is you, this is the first place you look for coverage.  Flood policies are nuanced, and there’s not enough space to get into them here, but it’s the first logical place to look.

Commercial Property (Buildings and Contents) – Flood is a standard exclusion on these policies.  That means if you own a building, or have coverage for belongings inside of a building, the most likely answer is that for this policy there is coverage.

…. However, on some policies, there is a coverage on the property enhancement for “water including flood”.  Property enhancements vary by insurance carrier, and it’s less common for this to exist, but it’s worth looking for if you have a problem.

… And also, just because it’s not currently on your policy, doesn’t mean that your insurance carrier can’t offer flood coverage.   Especially in areas that are not in a flood plain, some insurance companies have been more willing to offer flood coverage on their commercial property policy.  It’s hit and miss.  They may only be willing to offer coverage if you lease space on the 3^rd floor of a condo building, but you don’t know unless you ask.

Commercial Auto (Vehicles)– If you have physical damage on your vehicles, flood is typically a covered claim under your “Comprehensive” Coverage.  This is how a company like State Farm can get drilled by claims in Florida without offering any flood coverage in the state.

Inland Marine (Tools, equipment, works of art, or special pieces of property) —  There is no standard coverage form for Inland Marine, which means pretty much anything goes.  All the rules that typically apply to buildings and contents are thrown out the window.  This means if you have a piece of equipment or art damaged in a flood, and you have it listed on an Inland Marine policy, there is a reasonable chance there is coverage afforded under your policy.