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  • Writer's pictureMatt Boudreaux

Homeowners Insurance versus Homeowners, Plus Flood Insurance

Updated: May 7, 2020

Perils like wind, rain and hail, as well as bursting water pipes, can all result in interior as well as exterior water damage to your home. And, while most homeowners are aware that perils such as these are typically covered by homeowners insurance, many are unaware, and surprised to learn, that water damage due to flooding is excluded under the terms of their homeowners policy. Unlike water damage from wind, rain, hail and bursting water pipes, water damage from flooding results when overflowing bodies of water, such as rivers, lakes or oceans, flow onto normally dry land. This can occur due to weather events such as hurricanes, heavy rains or melting snow causing coastal flooding, flash flooding or flooding from the overflowing of bodies of water, such as lakes, rivers or bayous. Understanding this difference is important because it can save you from losing your most valuable asset by adequately insuring your home with flood insurance through the National Flood Insurance Program, a federal program designed to provide homeowners with affordable flood protection.

Recent weather events like Hurricanes Katrina, Ike, Rita and Harvey all caused flooding due to coastal storm surge and torrential rainfall and are perfect examples of why, today, flood insurance is so important to have. The extent of flooding produced by these storms was not predicted and caught many homeowners off guard, without flood insurance, and resulted in devastating personal losses. That is why, for homeowners living in a coastal state like Texas, having flood insurance is essential.

Also, when insuring your home, understanding the difference between purchasing coverage that pays property claims based upon Replacement Cost Value (RCV) versus coverage that pays claims based upon Actual Cash Value (ACV) is very important. Simply put, RCV pays you the market value of your loss while ACV is based upon market value less depreciation.

Additionally, the amount and percentage of your deductibles will determine how much you will pay up front and out of pocket for your loss.

Selecting the appropriate loss values, whether they be RCV or ACV, and deductibles, will determine how high or low your premiums will be and assist in tailoring your coverage to suit your budget and individual needs.

Once your policies are in effect, should you have the unfortunate occasion to sustain a covered loss we will here for you. Simply notify your insurer immediately or as soon after the loss as possible. This can be done by notifying your insurance company directly or through our agency; and a claim will be processed for the loss. We will assist in every way reasonably necessary to facilitate the claims process with your insurance company.

Setbacks are never easy, and you don't have to be alone. If you are already covered under flood and home insurance, we recommend that you have your policies reviewed to ensure that you aren't overpaying for your insurance, by exploring your options.

Want to know more? For security and peace of mind, contact one of our experienced and trusted agents today and we will be happy to discuss all of your homeowners needs and options with you, personally and on a one-on-one basis!

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