Flood Insurance for Your Automobile
If you live in an area that is impacted by hurricanes or flooding, you may wonder if there is separate flood insurance for automobiles. Car insurance does cover flood damage, sometimes. Though there is no specific flood insurance for cars, there are various types of auto insurance coverages that can help. Comprehensive car insurance covers water damage from rain or flooding if it happens when no one is driving the car. If flooding causes a total loss to your vehicle, GAP insurance can pay the difference between what you owe on your auto and the actual cash value that your insurance provider will pay. Though there is no actual flood insurance for auto owners, your car's flood damage merits an insurance claim. Learn more about how to handle flood damage to your car below.
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UPDATED: Jul 19, 2021
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Recent hurricane seasons have caused catastrophic flooding that did billions of dollars worth of property damage all across the American South And the Gulf Coast. naturally, tens — if not hundreds of thousands — of vehicles were likely damaged or completely destroyed by the uncontrollable floodwaters.
There’s a very real chance that you may be one of the unfortunate individuals who lost your vehicle in one of those storms. If you’re still struggling with your insurance company over your claim, if you’re researching the process so that you know how to go about filing a flood claim on your currently damaged vehicle, or if you’re simply researching in retrospect to figure out what you did wrong, we have the information you need. Just keep reading.
You can find out what auto insurance coverage options you need to protect yourself from flooding below. If you need to find a new policy, use our FREE comparison tool to find automobile flood insurance near you.
Types of Coverage That Cover Flood Damage
There are two main types of insurance coverage which will help keep you financially solvent in the event that your car sustains flood damage due to severe weather. unfortunately for some drivers, both of these coverages are optional; which means that, if you have the bare legal minimum insurance coverage that you are required to carry in order to drive, you likely don’t have either of these options on your policy right now.
Comprehension covers any damage done to your vehicle due to an act of God and/or nature. It also covers things like theft or hitting a deer in the middle of the road. But for the purposes of this conversation, we will stick to discussing how this type of coverage applies when you are filing a claim to repair flood damage to your car. When an act beyond your control – such as a catastrophic flood – damages or destroys your vehicle, you will have to file a claim with your insurance company in order to get it fixed or replaced. The only catch is that you will have to pay your comprehensive deductible first – which, for most drivers, is somewhere between $250 and $1,000 – before your insurance company will take the wheel and get your vehicle replaced or repaired.
GAP coverage is a unique type of insurance coverage reserved exclusively for people who have just bought a brand new car and are financing that purchase with an auto loan from a bank. GAP coverage exists because, the second you drive your new vehicle off the dealership lot, it loses thousands of dollars in value. However, that sudden and borderline inexplicable instant drop in value does not change the fact that you still owe your bank 100% of the purchase price you agreed on. And when you owe more money on your vehicle (or any piece of property for that matter), it’s called being “upside-down” on that investment.
Why is this important for flood insurance? Well, it’s not too hard for floodwaters to damage a vehicle so badly that it is considered a “total loss” by your insurance company. This means that, according to your insurer, Your car has sustained so much damage that it’s cheaper for them to cut you a check for the actual cash value of the vehicle rather than pay to have it repaired.
But what happens when you are upside down on your car loan and your insurance company deems your vehicle to be a total loss? well, it means that they will cut a check to your bank for the actual cash value of your car, truck, or SUV; and you will still owe your bank the remaining balance on your auto loan.
It’s a very unfortunate situation to be in, which is why GAP coverage exists. With GAP coverage, your insurance company pays off the balance of your loan in full Instead of the actual cash value of your destroyed vehicle. That way, your bank will be completely paid off and you won’t have any outstanding balances on your car loan. This frees you up to go out and get new financing on whatever replacement vehicle you can afford.
Since GAP coverage is only available to motorists who are purchasing a brand new car or truck, you cannot call up your insurance company and request to purchase and retroactively apply GAP coverage to your current car insurance policy. Sadly, it doesn’t work that way – no matter how desperate you may be to tell them to shut up and take your money. The moment you sit down with your insurance agent to craft and sign the final paperwork on an insurance policy for a brand new vehicle, you have to tell them right then and there whether or not you want GAP coverage. And if you miss your opportunity and that moment, then you’ve missed your opportunity for the life of your vehicle.
Unfortunately, you won’t know for sure whether or not your vehicle is considered a total loss by your insurance company until a claims adjuster evaluates the damage. if you fear that a total loss classification will put you upside down on your current loan, there are some things you can do before the claims adjuster arrives to make sure your vehicle is in the best possible condition for evaluation:
- Take as many photos as possible, and from many different angles as possible. The more evidence you have at the damage, the easier it will be for your claims adjuster to make an accurate evaluation.
- Avoid starting your car if you can help it. This is especially true if the water level has risen any higher then the floorboards of your vehicle. If you try to start your engine while it is full of floodwater, it could cause new or exacerbate current water damage.
- Call a mechanic you trust. Tell him or her about your situation, and ask for any advice they may be willing to provide. Sometimes, vehicles with water damage may need to have their oil, lube, and/or transmission fluid drained so as to prevent further damage.
- If you can afford to hire a tow truck to move your vehicle to higher ground, you should do so as soon as humanly possible
- Once the waters have receded, do your best to dry out the interior of your car. Mop up or vacuum out any pool water, leave the doors open while supervising your vehicle to avoid future damage or vandalism, and completely empty out your vehicle.
The general rule of thumb for most automotive insurance companies is that if your vehicle will cost more than 60 percent of its current actual cash value to repair, they will most likely declare a total loss and replace it instead.
But not all car insurance companies follow this rule, and some companies have different rules in different states. for some insurers, the threshold Is 75 percent instead of 60 percent. For yet others, they use a secret formula to determine whether or not to declare your vehicle a total loss. Take a look at the chart below if you want to find out what the total loss threshold is in your state.
|Recently Flooded States||Total Loss Threshold|
|Louisiana||Total Loss Formula|
When you have a random accident, it may not take that long to document the damage, contact your insurance company, file a claim, communicate with your claims adjuster, and get your car repaired or replaced. But if your vehicle is damaged or destroyed due to a natural disaster, you are going to be filing your claim at the same time as thousands upon thousands of other people who have to make similar claims with their insurance company.
Needless to say, your provider is going to be backed up and overloaded. The important thing is to be as patient as possible, and do your best to keep a cool head. Be nice to your claims adjuster and get it on their good side could help you get your claim processed, approved, and handled more quickly than all of the other irate and frustrated customers that are also trying to file claims and get their lives back to normal.
Then again, if you are one of those irate individuals who have had it up to here with your insurance companies slow and insufficient response, then you may be considering a switch to a different provider. During tough times like these, our first word of advice is to not be so hasty.
But if you are bound and determined to find a new insurance company, we would love to help. Just put your ZIP code into our FREE comparison tool, and we can get you fast, free quotes from local competitors in a matter of minutes.