Why does flood insurance not cover property in a basement?
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The purpose of flood insurance is to cover “unforeseeable” disasters that impact your home. Homes built in areas that are prone to flood typically need to be built high enough off the ground that the first floor in the building is above the 100 year flood mark. Although it is foreseeable that a home built to that standard will be flooded every 101 years, the reality is that chance is so low that it is not *legally* foreseeable.
So while it isn’t foreseeable that your first floor will flood, the same is not true of your basement. Basements are underground and act as drains for nearby water. This means that they flood all the time, including from normal levels of rain, and so it is foreseeable that your basement will flood. Because your basement is likely to flood in any given year, flood insurance doesn’t cover damage to *most* items located in it and you shouldn’t be storing anything valuable down there.
There are certain items that are typically located in basements, like water heaters. Those items are designed to withstand some amount of flooding, and so are covered by flood insurance because while a flooded basement is foreseeable, damage to an item that was designed to withstand that flood is not.
There are obviously ways that you can flood proof your basement. Most flood insurance policies are subsidized by the Federal Government, which doesn’t care about how flood proof your basement is. There’s nothing stopping you from finding an insurance company that is willing to write an unsubsidized flood insurance policy that covers items in your basement, but good luck finding one.
Because they don’t want to deal with how absurdly expensive that would be. Flood insurance it’s self only exists because the government is subsidizing people living in areas that are not economically viable.
Water will always find the lowest point it can. If that lowest point is your basement, then water will find its way down there eventually.
Insurance companies exist to make money. They make money by not paying for damages. If they know something will inevitably be damaged, they won’t insure that thing. Basements always flood and cost money. So insurances don’t cover basements.
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