Does the National Flood Insurance Program Cover Basements?

With so much flooding plaguing our country of late, it's no wonder that more and more homeowners are learning about the importance of flood insurance. Since financial losses resulting from flooding are not covered by standard homeowners insurance policies, it's up to individual homeowners to seek out additional flood insurance coverage to add to their standard homeowner's policy. This can be done through the National Flood Insurance Program (NFIP), which is administered by the Federal Emergency Management Agency (FEMA). Although flood insurance is purchased through the National Flood Insurance Program, it's actually sold through standard insurance company agents or brokers. Some select private insurance companies also offer flood insurance.

What's Covered by Flood Insurance?

Similar to the way standard homeowner's insurance is set up, flood insurance has a coverage component that provides protection for losses sustained to your structure and a separate component that provides protection for loss or damage to your personal possessions. Typically, there's a dollar amount cap of $250,000 for structural damage and $100,000 for your possessions. These two components are purchased separately and each has its own deductible amount. The NFIP recommends purchasing both components.

Flood coverage for your structure includes systems considered essential such as plumbing, electrical, water heaters, heat pumps and furnaces. You should also be covered for permanent carpeting laid over unfinished floors, other carpets over wood floors, window blinds and curtains. Wallboard, paneling, bookcases and cabinets permanently installed are also covered, but if only some cabinets are damaged only those will be replaced.

Personal Property Coverage

Personal possessions such as electronic gear, furniture and clothing are covered if you've purchased the personal possessions insurance component, but not if they're stored in the basement. Valuables such as artwork and furs are covered, but there's a $2,500 cap on these. Moveable appliances such as window-mount A/Cs, microwaves, washers, dryers, refrigerators and freezers (and the food in them) are considered personal possessions.

Basement Exclusions

Flood insurance doesn't cover improvements to your basement such as finished ceilings, floors or walls or any personal possessions found in the basement. Basements are defined as any area in your home that's below ground level. Another exclusion found in flood insurance is any damage caused by the movement of earth, even if that movement is caused by flooding. You should also note that a flood insurance policy typically has a 30-day waiting period before it goes into effect after purchase.