While the West Coast of the U.S. – especially California – suffers through a devastating drought, South Carolina is deluged by rain. Described by some as an historic “1,000-year flood”, the state is trying to dry out as water recedes. And, next comes another deluge – as homeowners insurance flood-related claims surge like a tidal wave heading directly for South Carolina insurance companies.
Over 2 feet of rain fell in some parts of the state, which prompted the distinctive “1000-year” label, mainly because the odds of that much water coming down at one time are considered so low that, according to statistics, it should only happen once a millennium.
That said, South Carolina may not be out of the woods yet and neither may homeowners insurance companies. But, it doesn’t stop there – as auto insurers are also bracing for a heavy downpour of car damage claims. Of course, whether an insurer will cover the damage depends entirely on individual policies. Those with comprehensive coverage are usually in good shape. However, if they don’t have comprehensive, they’re likely out of luck.
In regards to homeowners, they’re luck could go from bad to worse. The reason for this is simple. Flood damage sustained by homes and businesses is typically only covered by a special, separate policy that is sold through the federal National Flood Insurance Program. Since not all property owners are required to buy it, many opt to forego the coverage that costs on the average about $700 a year.
If a prudent homeowner decided to purchase flood insurance just prior to the rains and flooding, he or she could still be left unable to file a claim as each policy includes a 30-day waiting period before it takes effect.
An estimated total of about 11 trillion gallons of water fell across North and South Carolina combined, according to the weather service. And, what complicates the issue of paying out claims for what is expected to easily exceed $1 billion is the fact that, while almost all the damage can be clearly attributed to flood waters – in a state with nearly 2.2 million housing units – fewer than 200,000 flood insurance policies have been written.
South Carolina Department of Insurance director Ray Farmer said he was hopeful most people in affected areas have flood insurance, but that is not likely to be the case as damage is widespread. And, with only 10 percent of home and business owners covered for such an event, the majority of property owners could suffer twice should they not be able to repair or rebuild with the help of their insurance company.
A normal National Flood Insurance Program policy generally covers any direct physical damage to the policyholder’s property up to the replacement cost or the cash value of the damage up to the policy limit, depending on the coverage purchased.
When shopping for homeowners insurance in South Carolina as well as in other states, remember this – wind-driven rain damage is typically covered by your homeowners insurance, but only flood insurance covers the damage caused by rising water.
So, if you live in an area that is or may be prone to flooding – even if it’s not a “1,000-year flood”, getting the extra coverage could prove to be the best decision you’ve ever made.
Be sure your home is not under insured by getting a free South Carolina homeowners insurance quote today!
Was your home damaged by the heavy rains and flooding? Were you covered by flood insurance? Feel free to share your thoughts in the comments section below.