INSURANCE GUIDE

With a busy hurricane season expected this year and historic floods in the Midwest during spring, many people are experiencing flood damage. Unfortunately, the sight of water completely covering a car is all too common during these events.

Flood damage is handled very differently with auto insurance than it is with homeowners insurance. With homeowners insurance, flooding is never covered unless you buy a flood insurance policy.

With auto insurance, flooding is almost always covered as long as you carry comprehensive coverage on your vehicle.

car insurance flood damage

Flooding and Comprehensive Coverage

Comprehensive coverage on a vehicle is usually optional. Together with collision coverage, it makes up having full coverage on your car itself.

Comprehensive coverage is extremely broad. In fact, there’s almost nothing that isn’t covered by comprehensive coverage. Wear and tear problems and any damage that could’ve been easily prevented are not covered by comprehensive coverage, but almost everything else is covered, including flood damage.

The most common things covered by comprehensive are theft, fire, hail damage, hitting an animal, rodent damage, glass damage, falling objects, and water damage.

What Types of Water Damage Are Covered?

A flood is basically defined as rising water levels from a sudden event, such as heavy rains or a hurricane. Floodwaters can get into every part of your car, which often results in a total loss.

Flood damage is covered under comprehensive coverage.

Hailstorms can also cause extensive damage from both hail and water. Hail can break your windshield and windows, causing water to pour in. Both the hail damage and subsequent water damage would be covered under comprehensive coverage.

The only questionable situation is with proper maintenance and negligence. Proper maintenance means that you must maintain your vehicle in good condition with routine maintenance checks. Failure to do this might result in a claim denial because the insurance company could argue that the water damage wouldn’t have happened if you had kept your vehicle in good condition.

This is especially important with leaks. If you have a slow leak that results in water damage over time, this probably won’t be covered because you didn’t properly maintain your vehicle.

Negligence is a similar situation. Negligence basically just means that you failed to act in a responsible manner. In this case, it could mean not closing your windows during a heavy storm. If your windows are open and you have water damage, the insurance company likely will deny your claim.

What About Hurricanes?

Hurricanes can cause damage to a vehicle in a number of ways but is usually through falling objects onto a car or flooding. Flooding from hurricanes is not any different than regular flooding, so it is covered by comprehensive coverage.

However, there is a caveat with hurricanes. Since there is usually a fair amount of warning before hurricanes, many times insurance companies will place a hold on people buying comprehensive coverage after a hurricane warning has been issued.

The reason is that they don’t want people to take advantage of this coverage. If someone doesn’t have comprehensive coverage on their vehicle, but then buys it right after a hurricane warning is issued, they are only buying it to cover that one event. This isn’t a good or sustainable business model for insurance companies, so they don’t allow it to happen.

But if you’ve already had comprehensive on your policy before the hurricane, then you will have coverage for flood damage.

Is Comprehensive Coverage Required?

Comprehensive coverage is not legally required by states. It’s not a part of the legal requirement to carry liability coverage.

The only time that it’s required is when you have a loan or a lease. In this case, the finance company will require you to buy full coverage on the car in order to satisfy the terms of the loan or lease. They do this because they still own the vehicle, so they want their asset protected.

However, just because it’s not a legal requirement doesn’t mean that you shouldn’t have comprehensive coverage. Comprehensive coverage is usually quite a bit cheaper to buy than collision coverage. It covers you for a wide range of things, such as theft, flood damage, fire, and falling objects.

For the premium involved, usually, it makes sense to carry at least comprehensive coverage, even if you don’t also carry collision coverage.

On the other hand, if you have an old vehicle and have enough money to take the financial hit of losing a car, then you don’t need to carry comprehensive coverage.

Bottom Line

Having comprehensive coverage on your auto insurance policy will cover damage to your vehicle for a wide range of perils, including flood.

The only time flood damage isn’t covered is you could’ve taken reasonable measures to prevent the flooding, such as closing your window or doing routine maintenance. Also, many insurance companies prevent you from buying comprehensive before a hurricane, if you didn’t already have it.