If your car is damaged in a flood, you can rely on comprehensive insurance to cover the repair costs. Flooding is the most common natural disaster in the U.S., and every year more and more people are exposed to its hazards. Read on to familiarize yourself about how you car insurance will protect your vehicle in the case of a flood.
When Does Auto Insurance Cover Flood Damage?
To be covered for flood damage you need to have comprehensive auto insurance. While the coverage is in most cases not mandatory, if your car is under 10 years old and/or worth more than $3,000 we always recommend you carry it (and its counterpart collision insurance) anyway. While the coverage can be pricey, it will shield your car from many of life's uncontrollable events such as:
- Flood Damage
- Broken windshield
In terms of flooding, should their be a disaster and the water seeps into your car, all the repair costs would be covered by your comprehensive policy. Whether it's electrical failure, computer system failure, ruins the brakes, etc. you would always be covered.
What to Do If You Don't Have Comprehensive Coverage
Unfortunately, there is not much you can do if you don't have comprehensive insurance in a flood event. The liability portion of your auto insurance policy is only meant to cover damages you cause to other drivers--not your own car. If you have a homeowners or renters insurance policy, those never cover damage from flooding--even damage to the home. Even if you have a flood insurance policy, you could only use flood insurance for any personal property that was destroyed in your car as a result of a flood--not the car itself. If you fear for your car being damaged in a flood, we highly recommend you just add comprehensive insurance to your policy.
How to File a Car Insurance Claim After a Flood
Filing a claim for flood damage is the same as filing a claim for any other type of vehicle damage. You can either call up your company's claim center or you can file a claim online if the company allows it. We recommend you do this as soon as possible though for two reasons.
- Water will continue to damage your car
- Floods make it hard for insurance companies to deal with every claim in a timely manner
The longer you wait, the more damage the water can be inflicting on your vehicle. Secondly, major floods tend to slow insurance companies from dealing with every claim as fast as they normally would. If there was a major flood in your area, it is likely there are other drivers filing similar claims, and the insurance companies only have a finite amount of claims adjusters to evaluate each case. The sooner you file the claim however, the more likely you will be one of the first cases processed. In the meantime you should try to dry out the car as much as you can until your auto insurer can send over a claims adjuster.
When the claims adjuster finally comes, they will try to determine if the car is a 'total loss'. A car is considered a 'total loss' when the cost to repair the car is greater than its value. Half of the states have a threshold that needs to be surpassed for a car to be a total loss. In Oklahoma for example, the repair costs only have to be greater than 60% of the value of the car to be considered totaled. The other half use what is called the Total Loss Formula (TLF), where if the sum of the cost of repair plus the salvage value of the car exceeds the car's value, then it is considered a total loss.
Declaring a total loss on the car is not an ideal situation for most drivers unfortunately. Auto insurance policies only pay you the actual cash value of the vehicle, meaning what you paid for it minus how much it depreciated since. For example if you bought a Jeep Wrangler for $40,000 in 2012, and in 2017 it only has a value of $20,000, should a flood (or anything else) total it, you would only be paid the $20,000.
If you lease or finance your car, the actual cash value would not be enough to cover the cost you still owe to the leaser or financier. We recommend all drivers who lease or finance to get Gap Insurance at least for the first few years of the financing agreement. Cars, especially luxury types, depreciate quickly once they leave the lot. A flood and no gap insurance could end up leaving you in several thousands of dollars of debt.