The inundation definition according to the dictionary is the rising and spreading of water over grounds. In most cases, it is used synonymously with flooding when there is no risk of ambiguity.
Inundation and Knowing Your Coverage
Where water covers a property whether a burst pipe or flooding river, it can lead to extensive damage on the property and its contents. Therefore important to understand if your policy has coverage for inundation and to what extent it is covered. In most cases, it is paired with flood insurance and built into different types of insurance policies inclusive of a commercial or personal property and its contents.
Inundation and The Insurer
For the insurance company, a major factor for making an informed decision on whether to shoulder the burden of a risk (insuring it) like inundation is based on the assessment of the risk in question. Therefore, the risk of flood or flashflood refers to the capacity of economic flood loss and the probability of losses of that capacity occurring. The risk assessments focus on the following components:
- Hazard of inundation: this refers to the capacity/magnitude and the probability of flooding occurring. In terms of magnitude, it ranges from the discharge, velocity and depth of the flood.
- Level of exposure: this is the economic value of the property subjected to the hazard of flooding waters
- Amount of vulnerability: the relationship between the economic loss and the flood hazard properties.
- Measures: the effectiveness and performance of flood protection measures and damage mitigation activities that factor in flood hazard, level of exposure and amount of vulnerability.
When all the above components have been assessed, the insurer will determine the cost of the premium to be paid and the risk of flood is reflected in this. Policyowners with high risk of this will have to pay premiums higher than those in low risk areas. In the homeowners’ policy, the inundation will be treated in the following ways:
- As a compulsory addition to a homeowners’ policy
- As a standard inclusion that can be removed or opted out of.
- As a cover subject to low defined values, covering flooding for up to $10000 or less.
- Not covered at all
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