Does Auto Insurance Cover Floods?

To spare the suspense: yes, auto insurance covers floods, but only if you selected comprehensive coverage for your policy. 

​The good news is that most cars already have this coverage. Even better is that if you don’t have comprehensive coverage, you can usually add it to your auto policy.

Comprehensive coverage, sometimes called “other than collision” coverage, protects against most types of risks (that aren’t collisions), including floods, hail, wind, fires, and other acts of nature. It also covers theft and vandalism, risks more closely aligned with human nature than with mother nature.

Comprehensive insurance is part of full-coverage auto insurance, a term that refers to a policy that provides both liability insurance and physical damage insurance. Collision and comprehensive insurance both insure against physical risks to your own vehicle. 

Vehicles with a loan balance and leased vehicle usually have full coverage because the lender requires physical damage insurance for the car. Often, policyholders leave this physical damage coverage in place even after they pay the car off.

Of the two types of physical damage coverage, comprehensive (comp) coverage is the less costly, so some policyholders keep this insurance in place even on older cars that have lost much of their value. The move makes financial sense in many cases because comp coverage can protect against costly losses such as the catalytic converter theft or broken windshields. However, if the value of the vehicle is low enough relative to the claim amount, the insurer might total the vehicle, paying only the vehicle’s value rather than paying for the repair.

Think of your auto insurance policy as a modular way to protect your vehicle. Your policy is really several types of coverage options, some of which are required and some of which may not fit your needs. As one of the most affordable coverage options, comp makes a solid choice even for older cars, and especially if you live in an area where floods or other acts of nature might cause concern.

Discuss your coverage options with your agent or broker. Often, coverage decisions benefit from the context of their cost versus the potential cost of not carrying coverage.