Disasters come in many shapes and sizes. A burst pipe in your basement may not make the local news, but that doesn’t mean it won’t be a disaster for your wallet. Of course, plenty of people recognize this and prepare themselves with a homeowners insurance policy. However, many might not know that certain disasters aren’t covered by most policies.
Of course, property owners take out insurance for what it does do, not what it doesn’t — and it certainly does plenty. An insurance policy will make sure the holder avoids financial disaster from that burst pipe, as well as theft, fire, and other unfortunate events. As far as most homeowners insurance policies go, though, they often neglect to cover certain legitimate disasters.
Chief among these exclusions are floods. As was mentioned, a typical policy will protect against various forms of sudden water damage, like a burst pipe or damage from a freeze. However, if damage is done to your property as a result of a flood, even a flash flood, then the chances are that you aren’t covered. Floods aren’t restricted to costal or low-lying areas, either; the National Oceanic and Atmospheric Administration (NOAA) reports that “flooding occurs in every U.S. state and territory,” and, importantly, that “densely populated areas are at a high risk for flash floods” due to the way structures and paved roads reduce stormwater runoff.
Similarly, hurricanes and typhoons are disasters that can damage your property in ways that aren’t covered by a standard homeowners policy. Hurricanes often bring floods with them, for one, but even the wind damage alone may not be covered by your policy, especially if you live in a hurricane-prone coastal area.
Lastly, earthquakes usually miss the cut on homeowners insurance policies. Other forms of ground movements, like sinkholes and landslides, often get left out of coverages, as well.
The good news is that additional or separate coverage options exist to make sure you and your property are protected. For one, most Americans who have protection against floods get it through FEMA’s National Flood Insurance Program, or NFIP; if you don’t qualify, though, there are separate private options available as well. Protection for hurricane events usually needs to take the form of a hodge-podge of supplemental flood and windstorm coverages. Be sure to do your research on the deductibles for hurricane events, as they usually are calculated as a percentage of your property’s value — as high as 5% — rather than a flat figure. Private insurance companies typically offer earthquake coverage as an endorsement on top of their homeowners policies, or you can purchase it separately from your primary policy.
Let’s face it — in a perfect world, we wouldn’t need any sort of insurance. But as long as we’re here, we’ll continue doing what we can to secure ourselves and our futures, and insurance policies are one way of doing just that. So, while we can’t predict disasters, we can prepare for them. Take the time with your family to make sure everybody knows how to respond in the event of a disaster, and to make sure you’re prepared for whatever comes your way.
New to homeowners insurance? Check out this article for a rundown on the dos and don’ts of taking out your own policy!