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| Flooding in New Orleans |
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| Special Topics:
Flood, Backup, & Ground Water -
Those who own homes with finished basements need to be aware that their Homeowners policy may not cover the damage caused by water getting into their basements. The same is true for those homes build on slabs (with no crawl space). When the lowest level of the home is finished, water can accumulate there in the right situation and cause damage.
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Generally speaking, in Michigan, the Homeowners policy covers water damage caused by windstorm or hail damage to the exterior of the home and from leaking or bursting of the home's plumbing system. What many people do not realize is that it does not cover any of the following: rising ground water, surface water that seeps into the home, or water that backs up into the home thru sewer lines or drain lines. Any of these can cause major problems in the lowest level of a home.
You can purchase Sewer & Drain Backup coverage through your Homeowners policy. This covers the damage caused directly by the backup, and costs roughly $10 for each $1,000 of coverage. You'll find this easily available in amounts thru $5,000. (Just ask and your Agent will be glad to quote a price for your policy.)
Flooding is a different problem. Flood consists of any of the following (according to the National Flood Insurance Program):
- Overflow of inland or tidal waters; or
- Unusual and rapid accumulation or runoff of surface waters from any source; or
- Mudflow; or
- Collapse or subsidence of land along the shore of a lake or similar body of water as a result of erosion or undermining caused by waves or currents of water exceeding anticipated cyclical levels that result in a flood as defined above
Those who live near rivers or lakes are likely facing several of these types of flooding. In Michigan, the rest of us only really need to worry about an "accumulation or runoff of surface waters" threatening our homes. The way to protect yourself against flood damage is to purchase a special Flood Insurance policy. This kind of policy is subsidized and administered by the Federal Emergency Management Agency (FEMA) thru the National Flood Insurance Program (NFIP). Below are special links to information provided by NFIP about these Flood Insurance policies:
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There is an important limitation in the Flood Policy, as it relates to basements. It does not cover most of the common improvements made to "finish" a basement - such as carpeting and paneling. It also does not cover your Personal Property (contents) in the basement. You will find more about this in the Benefit Summary link above. So, the bottom line is that Flood Insurance is only a partial solution to this problem. It is not a solution for every home. At best, it should be considered on a case-by-case basis.
The other kind of water damage mentioned above is rising ground water. There currently is no common coverage available for this - not under a Homeowners policy nor a Flood policy. Our recommendation is that you consult with a licensed contractor about the options available for your home. Pumping - often using a sump pump - is one way that is used to control this. Your contractor can tell you what would be the best for your situation.
I hope this has given you some insight into the problems with insurance, as it relates to water damage in a finished basement in the state of Michigan. You can use Contact Us to reach one of our Agents for more information.
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(Note: This is a general discussion for the purpose of making the general public in Michigan aware of the issues. People in other states may face a different situation. For the exact details of your coverage, please consult your policy. Your policy language and provisions will govern in all cases. Nothing in this article will supersede the policy language and provisions.)
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