The Florida couple’s flood claim was denied despite twelve years of insurance payments. This is why

Sometimes loyalty pays off. But in insurance, that loyalty can feel misplaced if insurers fail to deliver at critical times.

Jaime Giangrande-Holcom and her husband had faithfully paid for flood insurance for 12 years. However, when Hurricane Helene flooded their Town N’ Country home near Tampa last month, they encountered a problem.

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The insurance adjuster informed them that the three-inch step down into their sunken living room classifies it as a “basement” under their policy, meaning it is not eligible for flood coverage.

“It’s ridiculous,” Giangrande-Holcom said WFLA reporters. “It’s comical to even come out and say the word basement in the state of Florida. I grew up in New York and I know what a basement looks like. I lived in basements. This is not a basement.”

This denial highlights how a small technicality can affect coverage, even for long-term paying customers. Here’s how such exclusions are possible and why homeowners should be aware of them.

How is this possible?

Giangrande-Holcom and her husband have a flood insurance policy through the National Flood Insurance Program (NFIP), administered by FEMA. This year they paid $3,800 for coverage, and so far they haven’t filed a claim.

NIV policies offer two types of cover: buildings cover and contents cover. Construction coverage protects your home’s structure and systems, including electrical and plumbing, kitchen appliances, carpeting, cabinets, walls, stairs, wells and solar energy installations. Contents coverage protects personal items such as a washer and dryer, a microwave, and valuables such as artwork (up to $2,500).

However, the NFIP policy does not cover personal property in basements. Their website defines a basement as any part of a building, including a sunken room or sunken part of a room, with the floor below grade (subgrade) on all sides.

This definition offers Giangrande-Holcom some hope. She pointed out that there is a 4-inch rise at the entrance to her home and only a 3-inch drop in the sunken living room. She has appealed the insurer’s decision, hoping these measurements will prove that her living room is not a basement.

Still, the couple is concerned that others in their community may face similar problems. Giangrande-Holcom said several families in the area are facing similar challenges.

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Is part of your home considered a basement?

If your home has sunken areas, your insurance may consider it a basement for coverage purposes. This classification can also come up if you sell the home, such as real estate agents could list it as a basement, which could affect the appraised value.

According to ANSI (American National Standards Institute) – a standard many real estate professionals use to measure a home’s square footage – any living space below ground on all sides is considered a basement. ANSI website notes that the standards are voluntary and simply provide “an agreed-upon formula for the best way to do something.”

For homeowners with flood insurance, it’s essential to know what their policy actually covers – and in most cases, this in no way includes any part of the home that is below ground level.

“It is critical for homeowners to understand what their policy does and does not cover when purchasing flood insurance to avoid out-of-pocket expenses,” a FEMA spokesperson told NewsNation affiliate WFLA. “There are online tools to help policyholders understand coverage decisions and how to appeal a decision.”

When flood risk is high, especially during hurricane season, homeowners should consider moving personal items from areas that might be classified as basements.

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This article provides information only and should not be construed as advice. It comes without any form of warranty.