- ORIGINAL NEWS
A flood insurance quirk makes basements a bad place to keep your stuff
- SUMMARY
Flooding is a common and expensive disaster in the United States, and it’s only getting worse due to climate change.
Most U.S. homes don’t have flood insurance, even though it’s separate from homeowners or renters insurance.
While you can get flood insurance through the government’s National Flood Insurance Program (NFIP), it doesn’t cover basement belongings, finished improvements, or items disconnected from power sources.
Private insurers may offer broader basement coverage, but what’s included varies depending on the company and policy.
If you’re concerned about flood risk, avoid storing valuables in your basement, move them to higher ground, or consider buying additional contents coverage.
- NEWS SENTIMENT CHECK
- Overall sentiment:
negative
Positive
“One silver lining to all this: Fewer U.S. homes are being built with basements.”
“The share of new single-family homes with full or partial basements has fallen by more than half since the mid-1970s, from 45% to 21%, according to U.S. Census Bureau data as of 2022.”
“Here are examples of how NFIP policies cover building and structure in basements, FEMA said:”
“Central air conditionersFuel tanks and the fuel in themFurnaces and water heatersSump pumps, heat pumps, and well water tanks and pumpsElectrical outlets and switches”
Negative
“Flooding is the “most common and costly natural disaster in the United States,” according to the Insurance Information Institute.”
“To that point, 99% of U.S. counties have experienced a flood since 1998 — and more than 40% of flood insurance claims are from outside high-risk flood areas, according to FEMA.”
“Flooding causes 90% of annual disaster damage in the U.S., according to the Federal Emergency Management Agency. Just an inch of water can cause roughly $25,000 of damage to a property, the agency said.”
“But homeowners and renters insurance policies don’t cover flood damage.”
“The problem is: If your basement floods, your flood insurance policy likely won’t cover damages to most — if any — of your belongings.”
“Most U.S. residents have flood insurance through FEMA’s federal National Flood Insurance Program. NFIP policies generally exclude personal property and other items stashed in a basement.”
“Nearly 21,000 policyholders filed a claim in 2023, with an average payment of almost $46,000, according to FEMA data.”
“The average annual flood insurance premium was $700 in 2019, it said.”
“However, it’d likely take more than a year for consumers to see these changes enacted, Griffin said.”
“”Policyholders with basements continue to be surprised that under the current Dwelling Form, the policy provides limited coverage in a basement,” FEMA wrote.”
“Annual losses from flooding are expected to grow by 61% by 2050, according to the Fifth National Climate Assessment.”
“Yet, there’s a shortfall in the number of properties insured for floods relative to those at risk, Griffin said.”
“The U.S. experienced 96 billion-dollar weather disasters in the two decades from 1983 to 2002, costing a total $546.3 billion in damages, according to The Pew Charitable Trusts. In the ensuing two decades — from 2003 to 2022 — those sums ballooned to 244 disasters and $1.95 trillion in costs, Pew found.”
“It may be a consequential exception for policyholders as storms (and resulting flood damage) are expected to grow more intense due to climate change, experts said.”