Flood Policy, Gulf Oil Spill, and Homeowners Coverage

June 7, 2010

We're receiving several calls on this incident from worried residents in Louisiana . Does the flood policy provide coverage for floodwaters contaminated by oil, or is the oil excluded as a pollutant? What about increased costs in removing the oil?

Florida Subscriber

The NFIP flood policy has no pollution exclusion for damage to the property from oil in the water; so if oily water comes in and the water is covered, so is the oil in the water. Even if the oil costs more to remove or makes an otherwise repairable home a total loss, the flood policy is going to provide coverage. The writers of the policy had not imagined something like the current situation in the Gulf.

This premium content is locked for FC&S Coverage Interpretation Subscribers

Enjoy unlimited access to the trusted solution for successful interpretation and analyses of complex insurance policies.

  • Quality content from industry experts with over 60 years insurance experience, combined
  • Customizable alerts of changes in relevant policies and trends
  • Search and navigate Q&As to find answers to your specific questions
  • Filter by article, discussion, analysis and more to find the exact information you’re looking for
  • Continually updated to bring you the latest reports, trending topics, and coverage analysis