Flood Policies Cover Some, But Not All Items In The Basement

TRENTON – The Professional Insurance Agents of New Jersey recognizes that many people who suffered losses in Sandy’s devastation may be confused or frustrated at the bureaucracies of documenting, filing and tracking their claims.

Insurance agents, the first point of contact for policyholders, are reporting that flood coverage regarding items stored in the basement is a particular sticking point. In an effort to clarify what home and business owners can expect in this scenario, PIANJ offers the following guidance.

Under the National Flood Insurance Program standard flood insurance policy, the Building Property coverage includes the following items:

  • foundation walls, anchorage systems and staircases attached to the building;
  • central-air conditioners;
  • cisterns and the water in them;
  • drywall for walls and ceilings (in basements only);
  • nonflammable insulation (in basements only);
  • electrical outlets, switches and circuit breaker boxes;
  • fuel tanks and the fuel in them, solar energy equipment, well water tanks and pumps;
  • furnaces, hot water heaters, heat pumps and sump pumps; and
  • clean up expenses.

The Personal Property coverage includes the following items:

  • washers and dryers;
  • food freezers and the food in them (but not refrigerators); and
  • portable and window air conditioners.

Neither Building Property or Personal Property coverages include:

  • paneling, bookcases, and window treatments such as curtains and blinds;
  • carpeting, area carpets and other floor coverings such as tile;
  • drywall for walls and ceilings (below lowest elevated floor);
  • walls and ceilings not made of drywall; and
  • most personal property such as clothing, electronic equipment, kitchen supplies and furniture.

It’s also important to note that a loss from sewer and drain backup is covered by a standard flood insurance policy (subject to an additional deductible), if the following four conditions are met:

  • there is a general and temporary condition of flooding in the area;
  • the flooding is the proximate cause of the sewer backup;
  • the sewer backup damage occurs no later than 72 hours after the flood has receded; and
  • the insured building must be insured, at the time of loss, for at least 80 percent of its replacement cost or the maximum amount of insurance available under the NFIP.

“PIANJ recognizes that this is a very difficult time for homeowners and business owners across New Jersey,” said PIANJ President Anthony F. Bavaro, CIC, CRM. “For those who are experience trouble or confusion with their insurance claim or coverage, we encourage you to contact your professional, independent insurance agent. Providing expert knowledge and a guiding hand in times of crisis is exactly why agents exist. Do not hesitate to lean on them if you need to.”

PIANJ is a trade association representing professional, independent insurance agencies, brokerages and their employees throughout New Jersey.

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