Does Car Insurance Cover Flood Damage?

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    If you have comprehensive car insurance, your car’s flood damage is covered. Comprehensive insurance pays for repairs or pays the actual cash value of the car at the time of the flood if the car is totaled.

    Flooding is more common than you might think, so it’s prudent to know what to do if your car is caught in a flood and the role insurance plays in the aftermath.

    Comprehensive Insurance Claims Have a Deductible

    Comprehensive insurance covers flood damage to your car, along with other problems such as a car fire, vandalism, hail damage and car theft.

    A claim on comprehensive insurance will have a deductible. A deductible is the amount deducted from your insurance claim check. For example, if you have a $500 deductible, your insurance company will write a check for the flood repairs for your car minus the $500 for the deductible.

    Not sure of the deductible that you have for your comprehensive insurance? Check the declarations page of your insurance policy.

    The average cost of comprehensive car insurance is about $168 per year, according to the National Association of Insurance Commissioners.

    Collision Coverage Packaged with Comprehensive Coverage

    If you’ve got comprehensive coverage there’s a good chance you have collision coverage as well. These two types of car insurance are often packaged together by auto insurance companies, and work together to cover repairs to your car. They supplement your liability coverage, which is required in nearly all states to drive legally, and only covers injuries you cause to others and damage you do to their property.

    Collision insurance pays for damage to your car if your car hits an object or another car, regardless of who caused the accident. The average cost for collision insurance is about $378 per year, according to the National Association of Insurance Commissioners.

    If you finance or lease your car, your auto lender or leasing company likely requires that you have both comprehensive and collision insurance. When you pay off the auto loan, you can decide if you want to continue carrying these coverage or if it’s time to drop comprehensive and collision coverage.

    Other Types of Car Insurance

    Here are three other types of important coverage for vehicles.

    Liability insurance is required in most states and is typically the most expensive part of an auto insurance policy. Liability insurance pays out when you are at fault in an auto accident and cause injuries to others or damage to others’ property. Liability insurance also pays legal costs if you get sued because of an auto accident.

    Rental reimbursement is also known as transportation expense coverage. This coverage pays reimbursement for rental cars and public transportation expenses when your car is in the repair shop for a covered insurance claim. Rental reimbursement coverage doesn’t come with a deductible. It is optional and is added on to a policy for an additional cost.

    Gap insurance is coverage that covers the difference between what you owe on your loan and the value of your totaled or stolen vehicle. For instance, if your car is totaled in a flood, gap insurance pays the difference between the car’s actual cash value and what you owe on the car or the lease. Let’s say you have a $25,000 loan and your car is worth $22,000. If that car gets totaled you would still owe your lender $3,000. Gap insurance pays that $3,000 so you don’t have to.

    Gap insurance can also be applied if your car is stolen and not recovered.

    To qualify for gap insurance, you’ll first need to have comprehensive insurance and collision insurance on your car.

    Beware of Flooded Cars for Sale

    Cars damaged by floodwaters often make their way on the market. According to Carfax, 446,836 flood-damaged cars were on U.S. roads in 2020.

    If an insurance company totals a vehicle after a flood damage claim, it will issue a salvage title. That means the car can’t be driven until it’s repaired, passes an inspection and gets retitled. The new title will indicate that the vehicle had significant damage and has been rebuilt.

    Salvage title cars are usually sold at auctions to junkyards for parts or to dealers who will rebuild them, but can be sold to private buyers if the title shows there’s been flood damage.

    State regulations and laws regarding titles differ, with some states more lenient than others in their definition of salvage-titled cars. That means sometimes flood-damaged cars are retitled over the course of several sales, often across state lines, and wind up with a title that doesn’t disclose the damage.

    Flooded cars are also cleaned up and sold on the private market by unscrupulous owners who don’t tell unsuspecting buyers about the damage.

    Vehicles with flood damage can rot from the inside, sometimes gradually, and have mechanical, electrical and safety systems that could fail at any time, so naturally you want to avoid buying one. That means steering clear of cars with salvage or rebuilt titles.

    But how can you tell if a car has been flooded? A musty odor, damp or mismatched carpets, rust around the doors and pedals and inside the hood and mud under the seats are all signs you are looking at a flooded car.

    It’s wise to check the vehicle history report through a company such as Carfax or by using the National Insurance Crime Bureau’s free VINCheck, which shows a car’s history when you enter its vehicle identification number. Another source for researching a vehicle’s history is the National Motor Vehicle Title Information System website.

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