Flood insurance versus a homeowners policy in Michigan, and the 30-day wait

What a homeowners policy leaves out

DIFS’s flood page is blunt. Flood damage is typically not covered unless you have purchased flood insurance, and a standard homeowners or renters policy typically excludes it. Water and sewer back-up is not automatically covered either, though limited back-up endorsements can be bought. Flood insurance itself is available through the National Flood Insurance Program (NFIP) and from private insurers.

DIFS adds that you do not have to be in a flood zone to experience a flood. A zone designation decides if a mortgage lender requires cover, and it says nothing about where water can reach. For a house outside a mapped zone, the question is how much protection you want, and the map has no say in that.

What the NFIP treats as a flood

FloodSmart, the program’s consumer site, says the NFIP covers physical damage from water that enters the home from the ground up: surge, flash flood, heavy rain or the overflow of a body of water, and mudflow. It does not cover water that enters from the top down, such as wind-blown rain or a roof leak. That line decides which policy you should open first after a storm. Rain through the roof is a homeowners question; water rising through the basement floor is a flood question.

The 30-day wait, and its exceptions

NFIP coverage goes into effect 30 days after purchase. FloodSmart lists four exceptions: no wait when you buy with making, increasing, extending or renewing a mortgage; no wait when you change coverage at renewal; a 1-day wait in a newly designated high-risk zone within 12 months of the map update; and a 1-day wait for floods after a wildfire on federal land when you buy within 60 days of containment. MiReady and DIFS also say it typically takes about 30 days. Any page telling you flood cover starts immediately is wrong outside those cases.

The practical consequence is that the best time to buy is long before the forecast. A policy bought as water rises will not respond to that water.

What the NFIP pays, and what it does not

FloodSmart says homeowner building policies cover up to $250,000 and contents policies up to $100,000, that building and contents are typically bought separately with separate deductibles, and that policies last one year with a 30-day renewal grace period.

Basements get limited coverage. Building coverage includes items connected to power and installed there, such as central air conditioning, switches and outlets, furnaces and sump pumps. Contents coverage includes basement items connected to a power source, such as washers, dryers, window air conditioners and freezers. The same site’s exclusion list names personal property kept in basements, and the two statements conflict in wording, so keep your expectations to limited coverage and read the policy.

Whatever the cause of the flooding, FloodSmart says the NFIP does not cover currency and valuable papers, most vehicles, personal property kept in basements, property outside the building such as landscaping, septic, decks, fences and pools, temporary housing and additional living expenses, or business interruption. Standard NFIP policies do not cover mold damage either, and FloodSmart says to do all you can to prevent mold growth and spread and to discard flood-damaged items that pose health risks, after documenting them.

How big a flood loss gets

DIFS’s flood page carries an illustration for an average 1,000 square foot slab home: $10,600 for 1 inch of water, $20,150 for 6 inches and $27,150 for 1 foot. DIFS marks it as illustrative only and not for estimating real losses, and notes that a flood-certified adjuster’s room-by-room estimate is the only method the NFIP accepts. The widely repeated line about $25,000 per inch of water appears on no FEMA, FloodSmart or DIFS page we can cite, so we do not use it.

For what Michigan flood claims have actually paid, we counted OpenFEMA records. They hold 14,954 NFIP claim records for Michigan, 1,105 with a date of loss after January 1, 2021. Of those 1,105, 780 had a payment above zero, with a mean total paid of about $23,800, a median of about $10,900 and about $18.6 million in all. That is our own calculation, not a FEMA statement, and it covers insured claims only. It says that insured Michigan flood claims are often smaller than the DIFS illustration, and that most claims in the sample were paid.

Who is who in a flood claim

FloodSmart says to ask your NFIP adjuster for a driver’s license and a Flood Control Number card, which confirms authority to work NFIP claims. A restoration company is not an adjuster. DIFS says public adjusters must be licensed by DIFS and cannot charge more than 10 percent of a settlement, and your insurer’s adjusters work for the insurer and should not ask you to pay them.

Finding your flood zone

FEMA’s Flood Map Service Center at msc.fema.gov is the official public source for flood hazard information produced in support of the NFIP, and you enter an address, place or coordinates on its home page. EGLE’s floodplain page explains that a floodplain is land inundated by a 100-year flood, a 1 percent annual chance, and says an estimated 6 percent of Michigan’s land is flood-prone, including about 200,000 buildings. It links to flood maps, how to request a floodplain elevation, and how to seek removal through a LOMA or LOMR. The spring basement flooding guide shows how this fits the calendar.

A short list for an agent

Ask your agent four things: if your policy has a water and sewer backup endorsement and what its limit is; if you can buy flood cover and when it would take effect; what the policy says about basement contents; and if the property sits in a mapped zone. Write the answers down. DIFS publishes a free claim tracking sheet if you want a format.

None of these questions has to be settled before a restoration company starts work.