Flood Insurance - What FEMA Says, but Not Too Loudly

Lately, I have asked myself one question. What's the point of having a basement, and why finish it? Sure, it's energy efficient. You can have the same number of rooms you would in a two-story house with no basement, only it's cooler in the summer since it's underground. And, it increases the value of your home.

A lot of houses I saw in New England have basements, but few were finished. They were used much the way people with attics use theirs, for storage. They store old stuff, antiques passed down through the family. Things that are potentially priceless or at the very minimum worth a lot of money.

I received my acknowledgement forms from FEMA along with my Flood Insurance Claims Handbook. I perused it and found something very disturbing. On Page 2 of the Flood Insurance Claims Handbook under "Tips" it reads "[m]ove any valuable items out of your basement. Flood insurance only covers items normally found in a basement, such as a furnace or washer and dryer. Personal items are not covered." It's not even at the top of the list. It's the third item listed.

I have a basement, which "[t]he NFIP defines...as any area of a building with a floor that is below the natural ground level on all sides; otherwise, it is considered the first floor." What's the difference? I would think it would be easier to flood a walk-out basement than one surround by solid ground.

I asked questions when I bought the insurance, as well as questions about homeowner's insurance. Did I read the policies word for word? No. But, when I bought the policies I asked a very clear question: With flood insurance, if my house floods, everything will be covered, right? The unequivocal answer was YES, EVERYTHING WILL BE COVERED. I was lied to. I was lied to by omission.