Severe floods in your area are going to cause you to search for your car insurance paper to answer the difficult question: does car insurance cover flooding? The answer to this question is essential for businesses like yours. It can influence your investments and the type of insurance options that you can afford.
Don’t wait for a flood to hit before answering the question “does car insurance cover flooding?” Instead, take the time to read this article to learn more about this complex issue. While it might seem somewhat straightforward, it can be more complicated than you’d think.
Does Car Insurance Cover Flooding for Your Business?
Before answering the question “does car insurance cover flooding?” it is worth understanding just how much damage floods can cause to business. Even a few inches running into your business can cause serious problems. For example, it can get into your cars and engine and cause a variety of serious concerns. As a result, it is estimated that floods generate $3.5 billion of damage every year.
Just how much does the question “does car insurance cover flooding?” affect you? That depends on the type of business you run. Floods are more likely to affect the following businesses:
- Car dealerships.
- Car rental businesses.
- Auto mechanics.
- Delivery services.
- Trucking firms.
Each of these types of businesses relies on high-quality vehicles. Flood damage can seriously dent their quality. For example, a car dealership that suffers from a flood may end up having to get rid of thousands, if not millions, of dollars worth of vehicles. Even worse, a mechanic may have to pay for repair costs to flood-damaged vehicles. That kind of damage can be devastating to a business and even cause it to go bankrupt.
Does car insurance cover flooding in extreme cases like this or will you go bankrupt? The answer to this question is essential for any business to understand. Failure to address it adequately can result in a severe financial loss. Thankfully, you can also prepare for this concern by buying proper insurance or otherwise taking steps to manage any severe economic damage.
When Does Car Insurance Cover Flooding?
First of all, let us calm your concern by stating that the answer to the question “does car insurance cover flooding?” is usually quite positive. In fact, it is typically rare for car insurance to fail to cover this type of damage. That’s because car damage during a flood can be so devastating.
Why Water Damage Is a Problem for Businesses
If you work with cars in any way in your business, you know the kind of damage that a little bit of water can cause them. For example, an inch of water on the floor of a new car can cause mold and bacteria to grow here. It can also wear down the interior of the car in a nasty way.
Even worse, a foot of water can cover the brakes, get into the brake fluid, and ruin its efficiency. This will render the property as worthless from the head start. It can also get into the engine and electronics of your cars and destroy them. Replacing these aspects of dozens of cars can be costly and severely impact your business. Read more to understand what other damages flooding water can do to your business and how does flood insurance work to alleviate you from these problems.
Thankfully, Car Insurance Does Cover Flooding…Mostly
In just about every situation, your car insurance should cover flood damage to cars. That said, you need to purchase a comprehensive policy to ensure you get this kind of coverage. If you own a car lot, a car repair shop or a delivery firm, you probably already have this kind of insurance. However, those who don’t should consider investing in it right away.
That said, there are a few restrictions that come into play even if you do have comprehensive coverage for your vehicles. These concerns are essential to know. You may end up unable to get the kind of insurance you need for your cars. In this situation, you could end up losing thousands or even millions of dollars. There’s nothing worse than working hard for years and then watching your business success swirl down the drain with the flood waters.
Hurricanes Restrict Comprehensive Insurance
Comprehensive car insurance will ensure that your vehicles receive the type of coverage that they need after floods strike. However, most insurance companies will restrict your ability to purchase comprehensive coverage a few days to a week before, during, or a few days to a week after a hurricane. This fact might seem unfair to many business owners, but it is understandable from their perspective.
Before these restrictions, many business owners would only cover their vehicles with a basic policy. Then, when a flood-causing hurricane threatened the area, they would quickly buy comprehensive coverage. After the plan paid off on the damages, they would cancel comprehensive coverage and go back to the primary type. To avoid this kind of fraudulent activities, companies started restricting policy switches during these times.
As a result, it is essential to take steps sooner, rather than later, when dealing with possible flood damage. While it may cost you a little bit more money in the short term, it will save you an exponentially-larger amount if a hurricane or a flood strikes the area. It is always better to be safe and prepared rather than sorry in these circumstances.
Businesses who possess non-comprehensive policies for their vehicles cannot make an insurance claim. This situation can be very devastating when a flood strikes. Other restrictions include floods that were caused by your negligence or other types of outside influences.
For example, if your showroom flooded because you failed to repair its plumbing, there is a chance your claim will be turned down. Your policy may also be denied if you tamper or try to improve the vehicle on your own. Only professionals can dry and repair your cars. If they cannot be fixed, your comprehensive coverage should replace them.
As you can see, answering the question “does car insurance cover flooding?” is an essential task that every business owner must perform. This fact is particularly true if you belong to any of the business types that we highlighted in the first section of this article.
If you have suffered from flooding damage at your business and can help others answer the question “does car insurance cover flooding?” positively, please feel free to share this article with others. You can also comment below to let us know how you got through a rough flooding situation. We are interested in whether or not you followed our tips above or utilized inside personal knowledge.