Flood-related property losses are not covered under residential and commercial property policies but are generally covered under which types of policies?

• A. Homeowners and renters policies
• B. Personal auto policies and inland marine policies
• C. Commercial general liability policies
• D. Life insurance policies

Answer: (B)

Flood losses aren’t covered by standard residential or commercial property policies. Those policies exclude flood damage or require a separate flood policy to obtain coverage. The ways flood damage shows up in practiced lines of coverage are through personal auto policies and inland marine policies. A personal auto policy can provide flood coverage through the comprehensive portion, protecting a car from flood damage. Inland marine policies insure movable property and property in transit, and they can extend to flood damage for those kinds of property located away from a fixed premises. That combination—auto comprehensive for vehicles and inland marine for movable or in-transit property—is why these two types are the typical sources for flood-related losses outside standard property policies. The other options don’t fit because homeowners and renters policies cover dwelling and contents against certain perils but not floods, commercial general liability covers third-party liability rather than the insured’s property, and life insurance protects against loss of life or related benefits rather than property losses.