Mother Nature can give us a lot of free entertainment. There are few things more relaxing than hiking through the woods on a Saturday morning or sitting outside on a Sunday afternoon and watching the sunset. Mother Nature can also wreak havoc on your home and possessions when she decides to dump too much rain or snow or hail on you! Unfortunately, I have found that the damage that Mother Nature can do is often a lot less painful than the hurdles that insurance companies can put us through after Mother Nature has done her worst.
We moved to Florida in 2000. Our house was relatively new at the time, and we thought, in good condition. It had passed inspection easily, and after we moved in, our neighbors cooed about how much effort had gone into making our home “just perfect.” It certainly seemed perfect to us at the time.
However, a few months after we moved in, the rainy season began. First we noticed that we had tremendous flooding on three sides of our house. Every time it rained, we quickly had three inches of standing water in the front of our house and six inches of standing water on either side. Our garden suffered and so did our lawn. More importantly, the flooding made our front door and yard unusable for a substantial part of the Florida rainy season. Fortunately, we were able to correct those problems by installing gutters and drains (to the road) at a cost of a few thousand dollars. Money that we begrudgingly, but necessarily, had to spend. Unfortunately, we only decided to improve the drainage at the front of the house.
We assumed that our water problems were over, but that was not the case. A couple of months after the rainy season had ended, we were rearranging furniture in one of our rooms and discovered, much to our dismay, that an entire wall (concealed behind book cases) had been leaking, apparently for some time. The carpet in the room, baseboard along the wall, and some of the furniture, were all ruined. Also, the wall needed to be repainted. Of course, the leak was at the side of the house where we had elected not to improve our drainage. We knew that if we ever bought a house in Florida again, we would walk the property after a major rain storm to check the drainage.
We called out our insurance adjuster and he promptly appeared. He told us that the exterior walls in the house had not been properly sealed and that because the damage had been caused by flooding, our homeowner’s policy did not protect us from that kind of damage. Since it seemed that the leakage had occurred by groundwater seeping into the walls at the base of the house, we did not challenge the adjuster beyond a few “what if” scenarios. Then we paid another few thousand dollars to repair the damage. We also improved the drainage on both sides of the house and to the rear, at a cost of a few thousand dollars more.
At about the same time that we discovered the leak in our wall, we had yet another major downpour. For reasons that I do not understand, the downpour did not cause me any problems but my next door neighbor felt the full force of what can go wrong in a storm. After several hours of heavy rain, he and his family heard a strange gurgling sound. When they investigated, they found that sewage from the continuing rain had backed up into his home via all of his sinks, bathtubs, and toilets. The clean up was unpleasant, to say the least. He also had to replace flooring in many areas of his home due to damage. As we had found with the damage to our home from ground water, his homeowner’s policy did not cover the damage from the sewage back up.
The convergence of these events lead me to two conclusions. First and foremost, I was clearly not managing our insurance policies in a prudent fashion, so I gladly gave insurance management over to my wife. Second, we needed to review our insurance policies to determine how we could protect ourselves from water damage and related problems. Here is what we learned:
Homeowner’s insurance generally does not cover flood damage
In the months after Hurricane Katrina hit, we all read many stories about people who did not carry flood insurance on their properties. Sadly, many of Katrina’s victims did not live to regret the mistake. Although many residential insurance policies will cover damage from windswept rain, you will probably need a supplemental policy from the National Flood Insurance Program if you want to ensure protection from flood waters. If you live in a flood plain, you must have flood insurance to secure financing on your home (whether to purchase it or to refinance it). For others flood insurance is not required by law.
Flood insurance is not expensive. We pay about $350 per year (a small fraction of what we pay for our homeowner’s policy) but it did give a great deal of security when we experienced Tropical Storm Fay this past week. For more information, you should explore the Federal Emergency Management Agency website (www.fema.gov) and the Federal Citizen Information Center website (http://www.pueblo.gsa.gov/cic_text/housing/natl-flood/insurance.htm).
Don’t wait to explore your needs for a policy
Federal flood policies usually have a 30 day waiting period before they take effect. If you wait until you think you actually need a flood insurance policy, it will probably be too late.
Learn about sewage supplements
When my neighbor’s home was fouled by sewage, his losses could have been mitigated if he had previously purchased a sewage supplement to his homeowner’s policy. Flood insurance policies do not cover damage from sewage.
Don’t assume that natural disasters will not happen to you
Over the years, my homes (whether those I lived in as a child and those I owned as an adult) have been damaged by snow, high winds, hail, rains, flooding, and fires. I have experienced hurricanes, blizzards, tornados, and hail storms. Sometimes damage was significant. Sometimes it was minor, but could have been worse.
The point is that none of us can know when a disaster will strike. When it does strike, you will look first to save your loved ones and you will be grateful if no one is hurt. In the aftermath, however, you will find much needed additional relief if you know that you understand your homeowner’s insurance (and your car insurance, for that matter) so that you will not have to worry about paying thousands to repair or recover your home.
Image courtesy of U.S. Geological Survey