We get it – we aren’t a ‘coastal state’, and that is why in Michigan, flood insurance isn’t talked about much; except when required by a Mortgage Company for those purchasing a home and looking for funding. However, as climate changes continue to drastically affect weather patterns, we believe we owe our clients a duty to educate them.
First of all, the peril of flood is excluded from homeowner, dwelling fire, commercial building and renters’ insurance policies. It’s discussed the most often for homes or commercial buildings who have a mortgage company that ‘requires’ the purchase of flood insurance before they will loan money. In fact, I would guess that many of the flood victims of Hurricane Harvey who had flood insurance, did so because they couldn’t get a mortgage on their home without it.
Home insurance has coverage and ‘optional’ endorsements to cover you from things like burst pipes, leaking appliances, and backed up or stopped up sinks or toilets. House insurance, however, was never intended to cover you when the level of rising water from excessive rain or storm surges causes bodies of water (Hello Great Lakes State occupants), to overflow into people’s basements and homes.
In 1986, over a foot and ½ of rain over 3 days left 30 Michigan counties from Muskegon to the thumb a federal disaster area from flooding. More recently, in June of this year, the Tittabawassee River just south of Midland reported major flood heights of 32 feet, and the Saginaw River was crested at a flood height of 20 feet causing flooded and washed out roads across 5 counties.
So even though we don’t discuss floods in Northern Michigan, our agency does offer flood insurance and on homes, it can cost as little as $350 a year if you are not in a high-risk flood zone. Alternately, if you are in a flood zone it can cost upwards of $3,000 a year, and I’ve quoted some risks over the years that are over $10,000 in premium for the flood insurance alone if the home is in an area that is considered at a higher risk of having a flood loss.
We don’t expect clients to be experts in understanding the difference between flood and water loss for a structure, but we do suggest that you have an educated local insurance agent who is giving you the education you need to make these kinds of important decisions to protect your family and assets. As always, if you don’t have an agent that is assisting you, we are simply a phone call, email, or agency visit away.