Extensive flooding has left thousands of Milwaukee area residents with property damage. Gov. Tony Evers has requested help from FEMA, but for now, many are wondering if insurance will help pay for repairs.
Sarah Smith is the director of public affairs at the Wisconsin Office of the Commissioner of Insurance. The office works to protect consumers through insurance industry regulations. Smith says Milwaukee residents are calling for advice on insurance claims, she shares some tips.
This conversation has been edited for length and clarity
What are some of the common questions that people are asking?
Well, it's a common misconception that homeowners’ insurance will cover flooding and it does not. So unfortunately, every time there's a flood event that's a primary concern that we hear and one that we encounter from folks who do not have flood insurance and only discover that after a flood has occurred and only understand that they are on the hook financially when it's too late.
There are, of course, people that do have flood insurance policies and we encourage them to work directly with their agents and document the damages they might have experienced and determine the right route to start filing those claims with their flood insurance policies.
People may also want to pursue filing a claim with their homeowners' insurance. Sometimes that can be important to get a denied claim from an insurance company for federal assistance if that is going to apply in this case. But that's sort of determined by whether FEMA is going to provide that assistance to the community. I think a lot of people are experiencing, for the first time, the reality of potentially filing a claim and having it denied.
What are the first steps that residents should take to file a claim and to see if they are covered?
We always encourage people right away to make a list of damaged items. Obviously, people will show maybe water lines if they can take pictures to indicate how high the water might have risen, document whether there were appliances or furniture or things that might have been damaged. If possible, it's good to maintain some swatches if people have damaged curtains or maybe upholstery from furniture before they discard anything to make sure they've documented taken pictures.
Initiate that contact with your insurance provider to just make sure that all of those things are lined up before people start discarding any of that damaged material. If there's no proof or documentation of the damage that occurred before it's discarded, that's really challenging for the insurance company to verify that that was a loss.
What is and isn't covered by flood insurance? What's the distinction between insurance coverage for water damage and for flooding?
If the water originated from inside the home, if a pipe bursts and that causes water damage, that's something that a homeowners’ insurance would typically cover. But if the water originated from outside the home from rising waters that flooded the property, that's something that a flood insurance policy would be needed to cover.
According to the Wisconsin Department of Natural Resources, people living outside of mapped high risk flood areas file about 25% of all NFIP claims and receive one-third of federal disaster assistance for flooding. How should people decide if they should add flood insurance?
I think one important thing for people to keep in mind is that most people in Wisconsin are eligible to get flood insurance through the National Flood Insurance Program. There's a common misconception that only those who live in those mapped floodplains or special flood hazard areas, as defined by FEMA are eligible. That's not the case. Most people do live in a community that's eligible for the National Flood Insurance Program.
If you live somewhere that's not directly in the floodplain, your premium might be a little lower than you anticipate. We always encourage people to consider their risk, check out a quote and make an informed decision about whether to go without or get that flood insurance coverage.
Even those who live outside of the floodplain, as related to the data that you mentioned, a lot of people experience flooding outside of those defined floodplains, and one of the reasons for that is the FEMA floodplain maps only take into account historical flooding data. They don't project future flooding risk, and that's something FEMA acknowledges.
I think that's something that people should really be aware of and recognize that the risk of flooding does not stop at the floodplain line. Certainly with more frequent and severe natural disasters and high precipitation events like we just saw in Milwaukee, it's really worth considering for everybody to look in to their flood insurance options.
Floodsmart.gov recently added a quote tool that only takes a couple of minutes for people to get a really detailed quote and a few different options for quotes for a flood insurance policy through the National Flood Insurance Program. So I encourage people to check that out.
Is there anything else that you feel people should know about?
I would mention is that renters also have flood insurance options. So, we always encourage people to get renters’ insurance, which is a great option and very affordable. But the National Flood Insurance Program also has specific policies for renters that are known as contents-only policies, so they only cover what it sounds like: the contents within an apartment or a structure that someone is renting, not the building itself, which makes it much more affordable.
For auto insurance, I know particularly in this flooding event, a lot of cars were damaged. A lot of people were parked at the State Fair. There was a lot of auto insurance claims that might come out of this. People with comprehensive auto insurance are covered for flood risk for the vehicle. If people have collision-only insurance, then their flood risk is not going to be covered. We really encourage people to also consider that and make an informed decision about whether they get collision only or that comprehensive coverage.
The other perk of comprehensive coverage is that that will cover you if you hit a deer, which in Wisconsin of course is something that we do encounter pretty often. So comprehensive coverage for auto is a pretty good option for people to look at as well because it does include that flood risk.
Smith says people experiencing issues with insurance providers can visit oci.wi.gov/complaints.
