The Case For Flood Insurance

No matter how thoroughly you research flood zones, protection from risk is not guaranteed due to flood’s many causes. How do you protect your property from damage caused by sewer backup or a burst pipe? Due to the uncertainty around identifying flood exposed buildings, it is vital for brokers to help clients assess their risk. According to FEMA “just one inch of floodwater can cause up to $25,000 in damage”. Those of us in the insurance industry know that claims aren’t just from people living in flood prone areas, although that is also a concern.

When sewers back up, family members or guests accidentally flood a sink or bathtub, neighbors in multi-family housing cause a flood extending beyond their unit, pipes burst, or record rain and snowfall results in flooding, are you protected? It’s also possible that flooding can result from another disaster, such as an earthquake or tornado, causing structural damage. For insurance industry professionals, risk assessment is part of the job but it’s not always a familiar concept to insureds.

Similarly, other factors can affect the type of coverage a property owner should consider. If a property has an income suite with renters or rents the entire property, there are additional considerations for a landlord. Also, understanding covered property in a flood policy is not easily evaluated by an insured. What if there is no basement coverage and you just spent your life savings building a basketball court there? What if your landlord has a per unit water damage deductible and you are on the first floor? These are all reasons why a broker needs to support property owners in understanding how to identify and analyze risk potential.

Helpful agents will ask property owners specific questions to understand their true exposure from the flood.

  • What sort of flooding is possible?
    • Coastal flooding, inland flooding, burst pipes, sewer backup, seepage, etc
  • Do you know your flood zone?
    • The Federal Emergency Management Agency (FEMA) does designate particular flood hazard areas showing whether a property is within an area that has experienced flooding previously or is at risk of flooding.
    • Property owners who reside in high-risk flood areas and have mortgages from government-backed lenders are required to have flood insurance, either from the National Flood Insurance Program (NFIP) or other carriers.
  • Where is your main water valve and do you know how to turn it off? Many people have no idea.
  • Do you have cash at hand to pay for repairs, rebuilding, or replacing contents?
  • What kind of risk can you emotionally and financially handle?
  • Are there other factors that could affect your decision making?
    • For instance, where would your family go during repairs after a severe flood from a sewer backup?


Most general homeowner and businessowner insurance policies won’t cover damage resulting from flood and is usually a separate policy with options to cover both the structure and contents. People need help understanding which assets require special protection, including things like home business equipment, musical instruments, antiques, computer or camera equipment, and collectibles. Lack of product knowledge and understanding of risk or payment options can play a role in property owners not purchasing adequate flood coverage and limits. Sometimes, running numbers and offering different coverage examples can convince a client to consider.

When you need someone to underwrite insurance risks and provide quality insurance markets, contact Monarch E&S Insurance Services. We’re looking out for Retail Insurance Agents and Brokers while we protect our insurance markets.


“Legal Disclaimer. Views expressed here do not constitute legal advice. The information contained herein is for general guidance of matter only and not for the purpose of providing legal advice. Discussion of insurance policy language is descriptive only. Every policy has different policy language. Coverage afforded under any insurance policy issued is subject to individual policy terms and conditions. Please refer to your policy for the actual language.”