Does car insurance cover flood damage?

There is a lot of information out there regarding flooding damage to vehicles, and your insurance companies' guidelines, as well as state laws, will dictate how a car is determined to be a total loss in these situations. In cases of flooding, comprehensive car insurance coverage must be purchased for your card to be replaced or repaired after the damage. If your car is determined to be totaled or needs to be repaired, after damage from flooding, you will still owe the deductible listed in your policy. People can choose to have higher or lower deductibles on their plans, which affects their premiums. People need to choose a deductible they can afford. If a person cannot pay the deductible listed in their car insurance plans, and an accident occurs, it may cause delays in getting the vehicle repaired or replaced. There are numerous ways a car is determined to be a total loss. 

Determining A Car Is A Total Loss

Cars are determined to be total losses when they are severely damaged in a way that they cannot be safely repaired. Vehicles can also be determined to be a total loss if the costs to repair the car are more than the worth of the vehicle itself. It will be less expensive in this case for an auto insurance provider to purchase a new vehicle, leading to the determination that the car is totaled. It is also possible that state regulations and/or insurance company guidelines will deem the cost of repairing the vehicle to be too much for other reasons.

In some situations, it is not practical to fix a vehicle, even in cases where the vehicle repairs would be less than the actual cash value of the car. This is where car insurance provider guidelines kick in.

What Is Total Loss Ratio?

Using a formula, insurance carriers can calculate the damage ratio, also called the total loss ratio, which is used to determine whether a car is totaled. This ratio is compared to limits set by state law, and in some cases, limits set by the company itself. Some states regulate how high this damage ratio needs to be to declare the vehicle as totaled. The term for this is Total Loss Threshold. If a vehicle's total loss ratio is higher than the established Total Loss Threshold, or TLT, the car can be deemed a total loss. In states that do not have a required TLT, auto insurance providers generally use a separate formula to determine whether the vehicle is a total loss or not.

This is called the Total Loss Formula. The formula for this is Salvage Value plus Cost of Repair. If this is greater than the Actual Cash Value of the vehicle, the vehicle can be declared a total loss. Just over half of states do have a TLT threshold that is mandatory.

Does Car Insurance Cover Flood Damage?

If a person has comprehensive insurance; they can file a claim under this policy for damage due to flooding. Comprehensive insurance plans cover damage to your car up to its actual cash value when that damage is caused by natural disasters instead of accidents.

There are some cases where a collision insurance policy will cover costs due to flood damage. If you hydroplane, as an example, and either flip your car or hit another vehicle, tree, or object, your collision insurance coverage will pay for up to the actual cash value of the vehicle.

At times, a person’s lease gap insurance will kick in as well. This type of insurance plan covers costs if your car is totaled, and you owe more money than your car is worth. Lease gap insurance will pay the difference in what you get from your standard car insurance coverage and what you owe. Rental car reimbursement can also be beneficial for people whose cars have been totaled or damaged due to flooding.

Get the best rates for car insurance available at Bravo Insurance, with the top quote tools for free quotes and top auto insurance providers. Keep in mind that if you do not have comprehensive insurance coverage or collision insurance coverage, some of these situations may not be covered.