Does Your Car Insurance Cover Flood Damage?

Experts are predicting flooding on a historic level due largely to this winter’s record-breaking snow falls. Even if you don’t live in a flood plain, sudden heavy spring rains can overflow river banks, wash away bridges and flood roadways. That means dangerous driving conditions and the potential for flood damage to your vehicle. But will your car insurance cover flood damage? The answer is, maybe.

If you have comprehensive car insurance in place when the flooding occurs, most likely your claim will be covered. Most comprehensive policies include losses from windstorms, hail, water and flood. To be sure, check your policy or contact your insurance agent. Once you file a claim, your insurance provider will send an adjuster to assess the damage to your vehicle. Your insurance company will pay for the cost of fixing your vehicle or totaling it, whichever is less. And that’s where it pays to be an informed consumer, preferably while you’re looking for car insurance quotes.

Standard comprehensive car insurance policies are written to pay you or your vehicle’s lien holder the actual cash value – the depreciated value. The older your car is, the less that actual cash value is. If you’re driving a classic car or if you’ve made significant improvements or additions to the vehicle, you will be very disappointed with the payout should your car be totaled. You ought to look into a comprehensive policy that reimburses the agreed value. Under this type of car insurance policy, you and the insurer agree in writing what you’ll receive if your car is totaled or stolen and not recovered. By the way, if the market value of your car changes, you can adjust the agreed amount with an endorsement at any time. There is a third type of comprehensive policy, called stated amount. While somewhat cheaper than agreed value policies, it may not provide the replacement coverage you had in mind. Stated amount policies typically say the insurance company will pay lesser of the stated amount, the cost to repair the car not to exceed the stated amount or the actual cash value. In other words, this policy sets a maximum, but it doesn’t guarantee that it will pay out that amount.

If you don’t have comprehensive car insurance and live in a flood-prone area, you’ll have to weigh the value of your vehicle against the cost of a comprehensive policy.