By Michael L. Schultz
Indiana has just experienced one of its most serious flooding events in decades. Beginning August 11, severe storms dumped extraordinary amounts of rain across portions of the state—more than 11 inches in some locations. The White River reached record levels in several communities, widespread evacuations and water rescues were necessary, and homes and businesses throughout central Indiana sustained significant damage. Tragically, at least six deaths have been attributed to the storms and flooding.
For property owners now confronting the damage, an important point is that “water damage” and “flood damage” are not necessarily the same thing for insurance purposes.
Most standard homeowners and commercial property policies exclude damage caused by “flood,” which is generally understood to involve surface water inundating normally dry land. The Indiana Department of Insurance likewise cautions that ordinary homeowners insurance typically does not cover flooding. Separate flood insurance—often issued through the National Flood Insurance Program—is generally required for that risk.
But that does not mean every loss involving water after these storms is necessarily excluded.
The recent weather involved much more than rising rivers. It included torrential rain, high winds, falling trees, power outages, overwhelmed drainage systems, and other conditions that may implicate different provisions of a property policy. Depending upon the facts and the language of the particular policy, coverage questions may arise concerning wind-created openings, rain entering through storm damage, sewer or drain backup, sump-pump failure, collapse, fallen trees, or damage to equipment and other property. The Indiana Department of Insurance itself notes that some losses associated with severe weather may be covered even though traditional flood damage is not.
For that reason, policyholders should be cautious about assuming they have no insurance claim simply because their property contains floodwater—or accepting an insurer’s characterization of the entire loss as “flood” without examining how the damage actually occurred.
If your property was damaged, document everything before cleanup and repairs alter the evidence. Take extensive photographs and video showing the property, water lines, damaged contents, exterior conditions, openings through which water may have entered, fallen trees, roof or siding damage, and affected mechanical systems. Keep damaged materials when reasonably possible, preserve receipts for emergency expenses, and maintain a written chronology of what happened.
Most importantly, promptly report potentially covered losses. An insurance company should be given the opportunity to investigate the actual causes of the damage and apply the specific language of the policy. A loss involving several contributing causes can present substantially different coverage issues from a straightforward river-flooding claim.
The scale of this disaster is also a reminder for the future. Indiana reports that fewer than 1% of the state’s households currently have flood insurance, even though flooding can occur well outside areas traditionally regarded as high-risk flood zones.
For Hoosiers dealing with the aftermath of these storms, the immediate priorities are safety and recovery. But when it comes to insurance, do not assume that “flooding” ends the coverage analysis. The cause of the particular damage, the sequence of events, and the precise language of the policy all matter.