Auto Insurance And Flood Damage: What's Covered?

Natural disasters such as floods can cause significant damage to your vehicle. Whether your car insurance will cover flood damage depends on the type of insurance you have. Comprehensive insurance covers vehicle damage caused by weather-related events, including floods, and is often mandatory if you lease or finance your vehicle. Basic car insurance, or liability-only insurance, will not cover flood damage. Comprehensive coverage usually includes a deductible, which is the amount you pay before your insurance starts paying for repairs. It's important to note that flood insurance policies typically exclude damage to vehicles.

Comprehensive Coverage

It is important to note that insurance companies may place binding restrictions before a major storm, preventing policy changes or the addition of comprehensive coverage. Therefore, it is recommended to have comprehensive coverage at all times if you are concerned about flood damage. Comprehensive coverage can provide valuable protection and peace of mind for your vehicle in the event of flooding or other weather-related incidents.

Full Coverage

If you have comprehensive coverage, your auto insurance will likely cover flood damage. Comprehensive coverage is designed to protect your car from external events outside of your control, including flooding, heavy rains, hail, and windstorms. It is usually mandatory if you lease or finance your vehicle, and it's often paired with collision coverage as part of a "full coverage policy." Comprehensive coverage comes with a deductible, which is the amount you have to pay before your insurance starts paying for repairs.

Basic car insurance, or liability-only, will not cover damage to your car from flooding. You'll need comprehensive coverage, or "full coverage," to repair damage to your vehicle due to a flood or hailstorm. Comprehensive coverage also covers damage from windstorms and tornados, falling objects, lightning, and tsunamis or tidal waves.

It's important to note that insurance companies often put "binding restrictions" in place once a major storm is on the way, restricting changes to policies and the writing of new ones. So, you may not be able to add comprehensive coverage to your policy before a storm hits.

Additionally, comprehensive coverage may not pay for water damage caused by a lack of maintenance, such as leaving your windows down or your sunroof open during rain. It also doesn't cover owner-installed electronics like stereos, navigation systems, or sound equipment.

To protect your car from flood damage, it's recommended to park in a garage or higher elevation and to avoid driving through flooded roads.

Deductibles

A deductible is the amount deducted from your insurance claim check. For example, if you have a $500 deductible, your insurance company will write a check for the flood repairs for your car minus the $500 for the deductible. The deductible amount varies and can range from $0 to $2,000, with the average being around $500.

If you have comprehensive insurance, your car's flood damage is covered. This includes damage to the engine, electrical system, and transmission. However, it's important to note that owner-installed electronics are typically not covered. Comprehensive insurance also covers other types of storm damage, such as damage caused by falling branches or hail.

The cost of comprehensive insurance is relatively affordable, with an average cost of about $168 per year, according to the National Association of Insurance Commissioners. Collision coverage is often packaged with comprehensive coverage, and the average cost for collision insurance is about $378 per year.

When choosing a deductible, it's important to select an amount that you could afford to pay if needed. While a higher deductible will lower your premium, it will also reduce your claim payment. In the event of a flood, you will need to cover the difference between the claim payment and the cost of repairs out of your own pocket.

If your car is financed or leased, your lender or leasing company may require you to have both comprehensive and collision insurance. Once you pay off the auto loan, you can decide whether to continue with these coverages or drop them.

Exclusions

While comprehensive coverage will cover damage to your car caused by flooding, there are some important exclusions to be aware of. Firstly, if you only have basic car insurance or liability-only insurance, your policy will not cover flood damage. Comprehensive coverage, or "full coverage", is required to repair damage caused by flooding.

Secondly, flood insurance policies that are designed to protect your home and personal property typically do not cover damage to your car. So, if you live in an area prone to flooding, it is important to have comprehensive coverage on your vehicle, not just your home.

Additionally, comprehensive coverage may not cover all types of water damage. For example, if water damage is caused by a slow leak due to poor maintenance or leaving a window open during a rainstorm, your insurance may not cover the repairs. It is important to note that comprehensive coverage also includes a deductible, which is the amount you have to pay before your insurance starts paying for repairs.

Furthermore, comprehensive coverage may not cover owner-installed electronics in your vehicle that are damaged by flooding. This includes stereos, tape decks, CD players, scanners, two-way mobile radios, CB radios, televisions, video game systems, and computers. It is recommended to review your policy carefully to understand any exclusions and ensure you have the necessary coverage.

Additional Coverages

If you're looking for additional protection beyond comprehensive coverage, there are a few other types of optional auto insurance coverages that can provide further peace of mind. Here are some additional coverages to consider:

• Rental Car Reimbursement Coverage: This coverage is useful if your car is damaged in a flood and requires repairs. It helps pay for rental car expenses or alternative transportation costs while your vehicle is being repaired. This ensures that you can still get around even when your car is in the shop.
• Gap/Lease & Loan Coverage: Also known as Gap Insurance, this coverage is beneficial if your car is declared a total loss after a flood. It covers the difference between the actual cash value of your car and the amount you still owe on your lease or loan. This can save you from having to pay for a car that is no longer usable.
• Full Coverage: Full coverage is a suite of auto coverages that typically includes comprehensive insurance. It provides protection against a wide range of risks, including collisions, theft, fire, vandalism, and natural disasters. Full coverage gives you comprehensive protection and peace of mind.
• Rental Car Coverage: This coverage is specifically for renting a car. It can be useful if you need a temporary vehicle while your car is being repaired after flood damage. The coverage usually includes a daily allowance for a rental car, and you can purchase additional coverage if needed.

Remember that the availability and specifics of these additional coverages may vary depending on your location and insurance provider. It's always a good idea to review your policy carefully and discuss any optional coverages with your insurance agent to ensure you have the protection you need.

Frequently asked questions