Page 58 - BusinessWest September 15, 2021

Western Mass. residents know this well after a summer of often-incessant rain, punctuated by a few big storms that left a trail of flooded basements in their wake — most of which were not covered by insurance. But it doesn’t have to be that way.
“A homeowners’ policy is going to provide coverage for a hurricane or tor- nado — which is on everyone’s mind this time of year,” Vassallo said. “We’re covering for wind damage and hail. If the whole house blows away, we’re cov- ering for that as well.
“But flooding is always going to be excluded,” she went on. “You need to purchase a specific flood policy. The
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now a 10-year flood. We’re seeing things now that we never anticipated.”
overflowing rivers, streams, or ponds. Meanwhile, water backup coverage reimburses the homeowner for water that backs into the home through an outside sewer or drain.
“The key phrase is surface and/or groundwater coming into the build- ing,” said David Griffin Jr. senior vice president at the Dowd Agencies in Holyoke. “If a pipe bursts, causing water damage, or water gets in through the roof, or a tree falls through the house and water comes in behind it, that’s all covered [by a basic policy]. But if water from outside the home comes in — if the yard floods and starts to spill into the basement — you’ll need a flood policy to respond to that.”
While add-ons like earthquake insurance don’t sell big in New England for a reason, flood insurance is becom- ing an “absolute necessity,” Vassallo said, noting that it’s required in Mas- sachusetts for mortgages in designated flood zones. “A person no longer has the option; mortgages require it. You can’t close on a loan without it.”
Griffin said his team recently ran some numbers and found that only 3.5% of all homeowners in Massachu- setts have a flooding policy. Consider- ing that flood-zone requirement, the percentage of people who aren’t forced to buy the coverage but opt for it any- way is strikingly low.
Will a summer of heavy rain — or talk of more intense storms in the future — change that? Insurance pro- fessionals are watching closely.
A Disconnect?
While flooding from rushing water and rain is generally not covered by regular homeowners’ insurance poli- cies, floods remain the most common and most destructive natural disaster in the U.S., according to the National Assoc. of Insurance Commissioners.
From 1988 through 2017, flood damage in the U.S. cost almost $200 billion, according to the Natural Acad- emy of Sciences, and the increase in precipitation due partly to climate change was responsible for $73 billion, or more than a third of that, Investope- dia reported this month. These figures include all property damage, not just homes.
Nonetheless, only about 15% of homes in the U.S. are insured against floods, according to both a report from the reinsurance company Swiss Re and a survey by the Insurance Information Institute.
Dowd said homeowners should take a five- to 10-year perspective on what potential flood damage would actually cost. “Do I want to spend 800 bucks a year on a flood-insurance policy? Over 10 years, that’s $8,000. What’s the like- lihood of having a loss beyond that if
I have to self-insure? You can look at insurance as a long-term budget item.”
Consumers can access a cost esti- mator, where they can input data about their home, including its age, location, construction style, square
TRISH VASSALLO
basic policy is from the ground up — not the flood coming in from the surface.”
There are two types of coverage homeowners can add to their policy
to cover floods, Vassallo noted. Flood insurance covers water damage that results from water that has already hit the ground, pouring in from over- saturated yards, flooded streets, or
What was once a 100-year flood is
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