Does car insurance cover flood damage?

Car insurance covers flood damage if the policy includes comprehensive coverage. Comprehensive coverage is typically required for financed and leased cars, but optional for drivers who own their cars. However, many drivers choose to carry comprehensive coverage to protect themselves from non-collision damage, like flooding. That’s because state laws only require liability insurance, which covers damage that results from your car hitting someone or something. If you stick with the minimum insurance requirements, your car is not protected from flood damage.

Flood damage can be catastrophic

Comprehensive coverage handles any destruction that's not caused by another car, such as damage from wildlife, falling tree branches, or vandalism. Floods fall in this category, and with good reason. Even relatively shallow water can destroy important parts of your car. Water that only reaches the top of your tires can impact everything from your airbags to your electrical system. These issues make your vehicle unsafe and affect its resale value.

Comprehensive coverage limits the amount you pay to repair flood damage. Just choose a deductible you're comfortable with, and your insurance company will pick up the rest of the bill in the event of a flood.

Comprehensive damage doesn’t cover everything

It’s important to remember that comprehensive coverage is for one-time events that damage your car, like a storm. Comprehensive insurance doesn’t cover damage accumulated slowly over time. If your car doors leak when it rains, for example, your insurance will not pay for the resulting damage after a year of leaking. That’s because your insurance company considers you responsible for maintaining your car.

To sum up, your policy doesn’t necessarily cover flood damage – but it can if you want it to. If you aren't sure whether you already carry comprehensive coverage, check with your insurance company. You can always add coverage to your current policy if you don’t already carry it. Comprehensive insurance costs about $150 per year on average, and the deductible you choose is the biggest factor in how much it costs.

Comprehensive car insurance does cover flood damage, but standard liability insurance does not. That should be true of all comprehensive coverage and liability policies, no matter who the insurance provider is. However, most insurers have what are called “binding restrictions” to prevent people from buying coverage as major weather events approach.

A binding restriction is a short period of time in which an insurance company stops taking new business or making changes to existing policies. Binding restrictions are targeted to the areas most likely to be affected by a looming natural disaster and usually are not statewide. Once the threat has passed, the binding restriction is lifted and business as usual can resume.

Binding restrictions protect insurance companies from having to immediately pay for highly probable claims. It wouldn’t be fair to let people grab coverage at the last second, knowing water damage is about to happen. That’s why it’s important to confirm you have comprehensive coverage before a storm is on the way.

If you decide to file a claim, reach out to your insurance provider as soon as possible. If your area had a natural disaster, you’re probably not the only person who needs to process a claim. It’s also common for cars affected by flooding to be a total loss, so the process can take a bit longer.