Profitt Report: Flooding insurance vs. sewer backup insurance

Homeowners should know, flood damage is not covered in their homeowners insurance policy. Photo credit: Rob Fladeboe kron4 / Twitter

Nearly two weeks later, homeowners in Midland are still cleaning up the mess the flood left behind. Part of that mess: sifting through their insurance policies to see exactly how much financial help they’ll get.

“I’ll never be able to replace all that,” said Tracey Naples, a mother in Midland who lost everything in her basement to the flood.

Naples and many others in Midland didn’t experience flood waters rushing in through the doors, but water rushing up from the pipes and sewer.

“I would estimate it was probably $20,000-25,000, if an insurance company was to come in and replace everything, the backup insurance we had was only $5,000,” said Cindy Baiardi, a homeowner in Midland.

Karl Ieuter, owner of Ieuter Insurance Group in Midland, said about 90 percent of the claims coming in are from backup sewer damage, not flooding.

“A lot of people are finding they thought they could clean up their basements for $5,000, $10,000, but it's not the case,” Ieuter said.

He explains, backup claims are common (i.e.: a sump pump failing) and your coverage could range from $5,000 to $55,000.

“If they have a fully finished basement they really need to buy a higher limit,” he said. Typically, backup insurance will cover the belongings in your basement.

Flood insurance is different. It covers waters rushing into through the doors or windows and it’s by the federal government. Rates are set depending on where you live, your home’s value, etc.

While backup insurance will cover your basement’s contents, flood insurance will not.

“Like the water heater and furnace is the only type contents that will be covered in the flooding policy,” Ieuter said.

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