Do you need flood insurance in metro-Detroit? Over the last few years, it seems as though the lower half of of Michigan is seeing increasingly severe storms dumping torrential rain in brief windows of time. As a result, people who have never seen water in their basements have experienced water.
In some cases, it is entering as a result of the storm depositing water around the home that seeps inside. In other instances, the drainage systems become overwhelmed or fail, causing water to back up into the house via the drains.
As mentioned in previous articles, water is your #1 enemy when it comes to protecting your home from damage. Water is insidious, it creeps in – a trickle here, a splash there – and all of a sudden you have damaged walls or mold or foundation issues. If the water isn’t creeping in, then it may be flooding in, requiring major, immediate cleanup.
There are areas in metro-Detroit that probably never should have been built on! (I’m giving the side eye to you, Canton!). Let’s talk about flood insurance in metro-Detroit.
Why do I need separate flood protection?
Flood damage is NOT part of your standard homeowner’s insurance policy! According to the National Flood Insurance Program, just 1-inch of water can cause $25,000 in damage.
What is flood insurance?
Flood insurance is a separate policy from your homeowners policy covering flood damage. Purchase a policy from either a private insurance company or through an agent partnered with the National Flood Insurance Program (NFIP).
A policy covers physical damage to your “building”. You may also purchased additional coverage to cover the contents of your home. Now, this is insurance, so of course there are exceptions to both types of policies.
Your policy rate will vary based on your property’s flood risk, how much insurance you purchase and what the policy covers. There is usually a 30-day waiting period from date of purchase until the policy kicks in. The policy renews annually.
Definition of Flood
For flood insurance purposes, “flood” is defined as a temporary condition with water or mud that affects normally dry land. Additionally, the damage must affect either:
- 2 or more properties in the area, not just your property, or
- two or more acres of land on your personal property, if only your property is affected.
If your house is the only house on the block with a basement full of water, you’re going to be out of luck. Ensure your gutters are clear and your yard drains properly, to drain as much water away from your home as physically possible.
Causes of Flood Damage
We don’t see many hurricanes here in Michigan, but we have been experiencing severe storms with rapid rainfall and overloaded drainage systems that are unable to handle the runoff. Rapid snow melt can also cause large amounts of runoff as the frozen ground is able to absorb the water as it melts.
With more development and less vegetation in our communities, water runoff is an increasing concern. Concrete does not absorb water! (Queue the song “They paved paradise and put up a parking lot.”)
Rate Determination
The National Flood Insurance Program (NFIP) sets the rates for flood insurance. You cannot shop the rates because they are set at the national level.
Several factors determine your specific rate:
- age of your home
- number of floors
- construction methods
- elevation of the property and location of the lowest floor, and
- your property’s flood risk (high, moderate, low).
FEMA (Federal Emergency Management Agency) determines the flood risk for your location. A flood map shows your risk level within a community, which will determine the cost of your flood insurance.
The lower your risk, the lower your insurance premium. (Obvi, but, I’m calling it out anyways!)
Check Your Home’s Flood Risk/Zone
You can access FEMA’s flood maps and other local government information. FEMA can alter your risk level if certain factors change.
A “flood risk” is not historical. It is based on current factors such as rainfall, river-flow and tidal-surge data, topography, flood control measures and building development changes in the area.
Visit the FEMA Flood Map Service Center to review your home’s classification and risk. There are now some areas where flood insurance in metro-Detroit is just a good idea.
Mandatory Flood Insurance for High-Risk Areas
Your mortgage lender requires flood insurance if you live in a high-risk area and the mortgage is federally insured/regulated. The lender usually requires you purchase a policy before you can secure the mortgage.
Low- to Moderate-Risk Areas
Flood insurance is not required if you live in low or moderate risk areas or if you own your home outright. That being said, low-risk just means the chances are lower and does not guarantee you won’t experience flooding.
National Flood Insurance Program
Typical Coverage for Flood Insurance
Building coverage:
- actual structure/foundation
- detached garages
- electrical and plumbing systems
- central A/C, furnace and water heater
- certain appliances
- permanently installed carpeting
- paneling
- built in bookcases and cabinets
- fuel tanks, well water tanks and pumps and solar equipment
- debris removal
Personal contents coverage:
- clothing
- furniture
- electronics
- curtains
- carpeting
- portable A/Cs
- microwaves
- washer/dryer
- items such as artwork and furs, up to $2,500
Excluded items:
- property and belongings outside of the insured building such as trees, plants, septic systems, walkways, decks, patio, fences, hot tubs and swimming pools
- money, currency, stock certificates and precious metals
- expenses for temp housing
- cars, motorcycled and “self-propelled” vehicles
- avoidable damage such as moisture, mildew and/or mold
- standalone freezers and food in them
- certain personal property kept in basements (this is a big one and can vary by area/risk!)
But what about government assistance?
Government aid kicks in when your home is located in a declared federal disaster area. Government aid is either (1) a $5,000 grant or (2) a loan that must be repaid. Flood insurance protects you regardless of whether federal aid is available. Having a flood insurance policy does not prevent you from receiving aid.
For more information and how to find an agent to work with, check out FloodSmart.gov.
I hope you found this article about flood insurance in metro-Detroit to be informative. As we continue to experience climate change, it is best to be prepared. Don’t get stuck holding the bag on flood damage. As always, reach out if I can answer any questions or help you find resources.
Photo by Yaroslav Shuraev from Pexels
