Yes, car insurance covers flood damage only if you pay for comprehensive coverage.
Floods are common natural disasters in the U.S. and more frequent in many northeastern states.
If your car falls among the casualties of flooding, for example, after the recent hurricane Ida, you can claim the damage under your comprehensive insurance.
How Does Car Insurance Cover Flood Damage?
Car insurance covers flood damage only if you have comprehensive coverage.
Comprehensive car coverage helps cover certain types of water damage, depending on the cause, such as flooding or hail. It will pay for the car repair or replacement if the insurer certifies that the water damage was a covered peril.
In most cases, comprehensive coverage is optional (not mandatory). But, if your car is on loan, your finance may demand that you buy it. It is also recommended to carry comprehensive insurance (and collision insurance) if your car is under 10 years old and/or costs more than $3,000.
Although comprehensive coverage can be costly, it will shield you and your car from flooding and many of life’s uncontrollable events, like broken windshields and vandalism.
When Does Car Insurance Cover Flood Damage?
Comprehensive insurance covers flood damage, but it depends on what the floodwater got into and how deep the water is surrounding the car.
How Do You Check For Flood Damage?
If flood water does not rise higher than the floor of your car, you may get lucky and avoid damages or get just minor damages that your deductible can repair. In this case, car insurance may not cover any damage.
If the floodwater line rises higher than the car floor (partial submersion), above the tires, or up to the dashboard, you risk damage to your braking, engine, and other electrical systems.
You may need to check your car’s oil level and/or look for water droplets on the oil dipstick. If you see water droplets, or the reading is too high, chances are water sipped into the engine. This can cause your engine cylinders to be broken, and the damage can be more extensive. Your comprehensive insurance will cover the damage after your deductible.
But if the floodwater damage causes a total loss, your insurer will reimburse you the car under the terms of your insurance policy — such as actual cash value.
Comprehensive car insurance does not cover water damage that occurs because of maintenance issues, like a slow leak or leaving the window open during a rainstorm. In addition, the coverage won’t be for things that aren’t permanently installed in the car, such as GPS systems or removable radios.
Note: Car insurance will cover damage from flooding in your area for the first time but will not cover the second and subsequent floods. Insurers want you to take precautions for subsequent floods and prevent damage.
What If You Don’t Have Comprehensive Coverage?
Unfortunately, if your car gets submerged in a flood during a storm, and you don’t have comprehensive coverage in your policy, there is nothing much you can do.
The policy’s liability portion covers damages you cause to other drivers — and not to your own car. And, homeowners or renters insurance doesn’t cover flood damage to vehicles.
If you have flood coverage in your insurance policy, it will only cover the personal property that the flooding destroyed in your car — not the car itself.
In this case, your only hope rests in the federal aid for natural disasters that come in the form of low-cost loans.
So, if your area is prone to flooding or if you fear your car might be damaged in a flood, we recommend that you add comprehensive coverage to your insurance policy.
What To Do If Your Car Gets Flooded
Now that you know that car insurance might or might not cover you after your car gets flooded, what next?
First things first: ensure your car insurance covers flooding. If you have comprehensive insurance, proceed and do the following:
- Call your insurance provider or agent and inform them of the flooding.
- Take plenty of pictures (and videos if possible) from different angles to document the evidence of flooding to your insurer. Make sure the insurance provider can see the floodwater levels in your car.
- Do not start the car because potential water in the engine can cause further damage.
- Contact your insurer-approved mechanic to check whether the oil, lube, and transmission fluid need to be drained.
- Submit your insurance claim to your insurance company as soon as possible. You can either file the claim online if your insurer allows it or call up the company’s claim center.
- Wait until the flood water recedes and get a towing service to move the car to higher ground. Take caution not to endanger your well-being.
- To avoid further damage to the car, get an insurer-approved professional to remove all floodwater pooled in your car.
Why should you submit your claim as soon as possible? Two reasons:
- The longer you stay, the more damage your car can get from the floodwater.
- If it’s a major natural disaster, many others will be submitting their claims as well. The sooner you file your claim, the more likely you’ll be served first.
After Filing A Car Insurance Claim, What Happens Next?
You will file a claim for flood damage the same way you file a claim for any other type of car damage.
Once you contact your insurance provider, a claims adjuster will come to inspect the damage. The adjuster will also determine if the car is damaged to the extent of a total loss.
Alternatively, the insurer can send a towing service to take the car to an approved mechanic who will determine its condition and value.
The threshold for ‘total loss’ is different from state to state. In Arizona, for example, the car is to be considered totaled if the repair costs are greater than 60% of the car’s value. But this depends on the Total Loss Formula (TLF).
According to the TLF, if the sum of the repair cost and the car’s salvage value exceeds the car’s actual value, it’s a total loss.
Depending on the outcome and valuation, the insurer will service your claim based on the provisions in the policy and after the deductibles.
Can Gap Insurance Help Cover Flood?
If you finance or lease your car, the actual cash value will not be enough to cover what you still owe the financier or leaser — especially after the deductible.
We recommend that drivers who finance or lease their cars get gap insurance. This is important for the first few years of the leasing or financing agreement. Why?
Cars depreciate quickly once they’re out of the lote, especially luxury types. A flooding disaster and no gap insurance may leave you in thousands of dollars of debt.
You’d rather be cautious than sorry.
Flooding as a disaster needs preparedness. As a driver, your ultimate preparedness level is buying car insurance. The type of car insurance you carry also determines whether or not you’re fully protected. If you can, always carry comprehensive insurance to ensure you’re fully protected from any mishap.