Does Your Homeowners Insurance Policy Cover Flood Damage?


An East Lansing woman was on the phone with her husband on a recent afternoon when she heard a thud in her basement. When she went to investigate the strange noise, she discovered one of the walls had collapsed. Unfortunately, the wall gave in, but their insurance policy wouldn’t.

Since the wall was a load-bearing wall, and the couple had lost both electricity and gas, they were forced to leave their home with their infant son. No big deal, they assumed—they had homeowner’s insurance. Except, they quickly learned that their insurance specifically did not cover calamities of this nature. Instead, they will be forced to pay the $25,000-$30,000 out of pocket for the reconstruction of the wall and since their home is unlivable for the time being, they have to rely on the kindness of their friends who are letting them stay in their home.

What most consumers may not know is that it’s actually pretty standard for most insurance companies to deny a claim for a collapsed wall, unless the policy specifically includes flood damage coverage. Because flood damage coverage is not a part of most standard homeowners policies, consumers could easily be going about their day to day lives thinking that their homes are covered for perfectly foreseeable disasters when in fact they are not.

The executive director of the Insurance Institute of Michigan responded to this recent incident by stating that consumers, not the insurance companies who create the policies, langugae, and exclusions, should be responsible for knowing what their insurance policy does and does not cover. In a day and age when policies contain the most detailed exclusions, all designed to protect the insurance company from ever having to actually pay for repair to your home, this mentality from the insurance industry shows just how unethical their mindset is.

Rest assured, consumers are learning the importance of reading every piece of fine print in their policies. It’s a shame and a disgrace that so many Americans have had to learn to do so the hard way.

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