Does Flood Insurance Cover My Basement?

Flooded water on a basement floor
Does Flood Insurance Cover My Basement?

The National Flood Insurance Program (NFIP) was designed in the late 1960s to help protect property owners against flood damage, and it has done a great job in doing so. Since its inception the NFIP has paid over $73 Billion to victims of floods, helping families get back to normalcy after a catastrophe of massive proportions, and will continue to do so for flood policy holders.  

Although having a flood insurance policy in your portfolio is a good idea, it is still an insurance contract with specified exclusions as to what will be covered by the policy. The worst moment to learn what is and isn’t covered by your flood insurance policy would be right after a flood catastrophe. The purpose of the accompanying blog is to inform you about some less visible coverages—or lack thereof—for your home’s basement level and to assist you in becoming fully prepared for a potential flood scenario. 

Will My Flood Policy Cover My Basement? 

The short answer is for some items yes it does, but for others no it doesn’t. Let’s dig deeper into it.  

First, The NFIP defines a basement as any area of a building with a floor that is below ground level on all sides. That definition can also be a little flexible, this also has the potential to include crawlspaces, lower levels of split-level homes, and sunken living rooms.   

Quoted directly from the Federal Emergency Management Agency (FEMA) website: 

“Basement coverage under the Standard Flood Insurance Policy (SFIP) consists of specific building items in a basement and cleanup. Items must be connected to a power source, where appropriate, and/or installed in their functioning location. Cleanup expenses can include pumping out trapped floodwater, labor to remove or extract spent cleaning solutions, treatment for mold and mildew, and structural drying of salvageable interior foundation elements.“ 

Anything that makes your home a habitable residence falls under this category. Systems include your foundation, furnaces, air conditioning units, heating fuel tanks, and water heaters. Also, if you have purchased the contents coverage on your flood policy, clothes washers and dryers, refrigerators/freezers and the perishables in them should be covered.  

It is important to note and be advised to have some sort of documented inventory of these systems in your basement for a seamless claims experience. In most events, the NFIP will require the claims adjuster to have this information on hand during the claims process. One of the easiest ways to do this is to simply take a video and/or pictures from your phone of these systems and store it online. Paper files are always good too, but we are talking about a flood here, and have you ever seen what water does to paper? 

Exclusions From Flood Insurance Coverage 

Now that we are aware of what is covered, let’s discuss a few exclusions that your flood insurance would not cover in your basement. If you have finished your basement to create additional living space in your home, there may not be much coverage for those finishes. Some specific exclusions on an NFIP policy include personal property such as furniture, electronics (Computers & Televisions), wall-art, generators, etc. The finishes themselves are also excluded like drywall, flooring, bathroom fixtures, and other built-ins like a wet bar. Not only do these items themselves fall short on the coverage spectrum, but the debris removal of these items in the event of a flood will not be covered as well.  

While the NFIP flood policy may fall short with finished basements, there may be options for you in the private flood market to explore. Some of those carriers will provide specific coverages for finishes in your basement if needed. This is where working with an experienced agent on which policy is a proper fit for you comes in handy. Any one of our flood insurance specialists at The Staples Agency will be able to walk you through the details of what it is you are looking for and get you set up with the proper coverages. When you are ready to have a discussion about flood insurance, please reach out anytime and it will be a pleasure to help.

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