The sinkholes that forced residents from the Forrest Hill condominium complex in Penfield have developed into a second insurance story. Residents reportedly returned to find mud and water inside their homes and basements, and at least one homeowner was told that the damage was considered flooding and therefore excluded by the homeowners policy.
That sounds straightforward, but water losses are rarely that simple. The source of the water, how it moved before entering the building, and the exact language in the policy can all affect the coverage analysis.
If you missed our first video about the insurance questions created by the Penfield sinkholes, watch Penfield Sinkholes: What Condo Owners Should Know About Insurance.
Why the cause of the water matters
Standard homeowners and condominium policies generally exclude flooding. In insurance terms, however, every loss involving water is not automatically a flood.
Rain entering through a damaged roof, a pipe that bursts inside a home, water backing up through a sewer or drain, an overwhelmed sump pump, groundwater entering through a foundation, and surface water flowing across normally dry land may all be treated differently. Some causes may be covered by the base policy, some may require an endorsement, and others may be excluded.
The Penfield situation reportedly began with a broken water main. That distinction may matter. Homeowners who receive a denial should request the decision in writing, including the policy language and exclusion on which the insurer relied. They should then review it with their insurance agent or another qualified professional rather than assuming that the first verbal answer is necessarily final.
How the NFIP defines a flood
The National Flood Insurance Program, administered by FEMA, uses a specific definition. Generally, a flood is a temporary inundation of normally dry land affecting at least two acres or at least two properties, one of which is the insured property. The water must result from an overflow of inland or tidal waters, an unusual and rapid accumulation or runoff of surface water, qualifying mudflow, or certain shoreline collapse or subsidence.
This matters because water in a single basement may not meet the NFIP definition. A broken water main could potentially create a qualifying flood if released water moves across normally dry land and meets the required scale, but a pipe failure does not automatically guarantee NFIP coverage.
NFIP policies also restrict coverage in areas defined as basements. Building equipment and certain structural items may be covered, while finished walls, flooring, furniture, and many personal belongings located below ground level may not be. Homeowners should understand those limitations before a loss occurs.
Flood risk does not stop at a map boundary
People sometimes assume that flood insurance is only relevant when a lender requires it. FEMA’s current data tells a different story: 29% of NFIP flood claims from 2014 through 2024 came from properties outside current high-risk flood areas.
Being outside a Special Flood Hazard Area means the mapped risk is lower; it does not mean the risk is zero. Heavy rain, rapid runoff, drainage problems, and infrastructure failures can affect properties that are not located near a river, lake, or coastline.
NFIP versus private flood insurance
Homeowners can often compare two broad options:
NFIP coverage is part of the federal program administered and financially backed by FEMA, although many policies are sold and serviced by participating private insurance companies. Coverage terms and maximum limits are standardized, and a standard waiting period generally applies.
Private flood insurance is underwritten by a private carrier. Depending on the home and insurer, a private policy may offer a different price, higher limits, broader contents coverage, additional living expense coverage, or different treatment of basements. Private insurance is not automatically less expensive or broader in every situation, so the policies need to be compared carefully.
When reviewing the options, ask about:
- Building and personal-property limits
- Replacement cost versus actual cash value
- Basement limitations
- Additional living expenses
- Deductibles
- Waiting periods
- Loss history and renewal provisions
- Whether the policy will satisfy your mortgage lender
What to do after water or mud enters your home
Safety comes first. Do not enter standing water if electrical or structural hazards may be present. Once it is safe, photograph and record the damage before cleanup, preserve damaged items when practical, save receipts, and report the loss promptly.
Keep notes of every conversation with the insurer, including names, dates, and what was discussed. If coverage is denied, request the denial and the policy provisions supporting it in writing. A disagreement about the cause of a loss can be different from a disagreement about the dollar value of the damage, so the appropriate next step will depend on the specific dispute.
Review the risk before the next loss
Flood coverage cannot be purchased retroactively after damage has occurred, and waiting periods may apply. The best time to compare the NFIP with private flood options is before the forecast, broken water main, or drainage failure puts your property at risk.
Every home and policy is different. VanScoter Insurance Agency can help you review your current coverage and compare the flood-insurance options available for your property.
Know your coverage, protect what matters, and give us a call if you need help.
VanScoter Insurance Agency | (585) 663-2004
Coverage varies by policy and circumstances. This article is for general educational purposes and is not a coverage determination or legal advice.
