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Depending on where you live, extreme weather events can happen at any time of year. Most policyholders know that their homeowners insurance covers losses from fire, lightning and hail. But what about damage from tornadoes, flooding or even volcanic eruptions? Bankrate’s insurance editorial team understands that knowing what losses your home insurance policy will and won’t cover is vital to protecting your financial well-being. Learn more about how your home insurance covers natural disasters and what additional options are available to safeguard against potential coverage gaps.
Key natural disaster facts
- The U.S. experienced 18 weather and climate disasters in 2022 that cost at least a billion dollars each. (NOAA)
- Natural disasters cost $74.4 billion in 2020. (Insurance Information Institute)
- Hurricane Katrina was the costliest disaster in U.S. history at over $16 billion. (Statista)
- Scientific evidence shows that human activity is driving the warming of Earth’s surface and oceans. (NASA)
- Between 2030 and 2050, studies show that climate change could cause an additional 250,000 deaths per year globally. (WHO)
Does home insurance cover natural disasters?
The goal of homeowners insurance is to offer financial protection when your home or personal property is damaged in a covered incident. There are several types of homeowners insurance for different kinds of dwellings and coverage levels. The HO-3 Special Form is the most common type of home insurance policy and the one we will refer to in this article.
If you have another type of home insurance, condo policy or renters insurance, coverage from natural disasters is likely similar, but you may want to speak with your agent to review how your policy coverage may differ.
A standard HO-3 policy usually includes the following coverage types:
- Coverage A: Dwelling
- Coverage B: Other structures
- Coverage C: Personal property
- Coverage D: Loss of use
- Coverage E: Personal liability coverage
- Coverage D: Medical payments to others
You can amend your policy to include additional coverage by adding an endorsement. HO-3 is an ‘open peril‘ or ‘all-risk’ policy, meaning that the dwelling and other structures have coverage from any peril that is not excluded from the policy. However, personal property is a ‘named perils’ coverage, which only has coverage from perils listed in your policy documents. Coverages A through D are the ones usually impacted by natural disasters.
Which disasters are covered by homeowners insurance?
Before you assume you are covered for a natural disaster, consult your home insurance agent or policy documents to be sure. Policy type, endorsements and exclusions can impact your coverage. Also, where you live, state laws and your insurance company’s underwriting criteria all play a part in how and when you have insurance coverage.
Tornadoes can cause damage to your dwelling, other structures and personal property with high winds, hail, flying debris and fallen trees. Most dwelling and personal property coverage will protect you financially from these types of damage. For instance, if wind or hail damages your roof and it causes rainwater to damage your home, you should be covered unless your policy excludes these perils. Some areas prone to tornadoes may require separate deductibles for wind or hail, called disaster deductibles. Flood damage resulting from a tornado is not covered under any standard homeowners insurance policies but would be covered under a separate flood insurance policy.
Like tornadoes, hurricanes can cause both damage to a dwelling, other structures and personal belongings. Hurricane damage caused by wind and hail is typically covered, though there may be limited coverage or a separate, higher deductible if you live in a coastal area. Many homeowners in high-risk hurricane areas must purchase additional windstorm insurance for adequate coverage. Again, flood damage is not covered unless you purchase a separate flood insurance policy.
Under a standard homeowners insurance policy, your dwelling and personal property are both covered if a fire causes damage. Your policy limits are typically the only restrictions for fire coverage unless you live in an area prone to wildfires or the fire was intentionally set by the policyholder. In wildfire-prone areas, wildfire is sometimes excluded as a peril. Tear-down and removal of damaged materials and belongings are also covered. High-value items like jewelry and fine arts may have limited or no coverage if they are not scheduled property.
If something explodes in or around your home, it is typically a covered peril. Your dwelling and personal property coverage should both pay if either is damaged because of an accidental explosion. An explosion caused by riot or civil commotion should also be covered.
A lightning strike could cause a fire, damage your home wiring or create a surge that ruins expensive electronics. Standard homeowners insurance coverage typically provides coverage for your dwelling and personal property, even if lightning strikes a tree and damages your home or belongings. The cost to remove the tree may not be covered, though, so be sure to check your homeowners insurance policy.
A volcanic eruption could also produce ash, dust, lava flow and shock waves. Homeowners insurance will usually cover damage to the dwelling and personal property. A resulting explosion or fire should also be covered. Earth movement, landslide, tremors, mudslide or earthquake caused by a volcano is not usually covered under homeowners insurance.
Most standard homeowners insurance policies cover the dwelling and personal belongings if they are damaged because of extreme cold. If a pipe bursts due to the cold, the pipe may not be covered, but the damage it causes should be. Damage caused by the weight of ice, snow or sleet and wind-driven freezing rain or snow is also usually covered if it damages the home or your personal property. If melting ground snow seeps into the home and causes water damage, that is usually not covered and would instead fall under a separate flood insurance policy.
Hurricane season 2023
- Hurricane Idalia made landfall in the Big Bend region of Florida as an intense Category 3 hurricane. The city of Perry, Florida, was hit the hardest as Idalia pushed through Florida and Georgia, but Idalia was downgraded to a strong tropical storm as it blew through the Carolinas.
- There were three Idalia-related deaths reported, a much lower number than anticipated since the storm made landfall in a rural part of Florida, and many residents took precautionary measures. Estimates put damage from Hurricane Idalia around $20 billion.
- Homeowners insurance typically covers some forms of hurricane damage but does not cover flood damage. Homes in high-risk areas may need windstorm insurance and flood insurance to avoid potential gaps in coverage. When a hurricane approaches, most insurance companies put a moratorium on increasing coverage or lowering deductibles until the storm passes.
Which disasters are not covered by homeowners insurance?
Though most natural disasters are covered by homeowners insurance, there are a few that are not covered.
Flood coverage is excluded from all types of homeowners insurance policies. Climate change has caused devastating flood events to happen more frequently across the country, especially in recent years.
Homeowners can purchase flood insurance from their insurance agent as a separate policy or directly through the National Flood Insurance Program (NFIP). The average flood claim paid by the NFIP over the last five years was about $69,000. The cost of flood insurance varies by state and where your home lies on the flood risk map. Currently, the average cost of flood insurance is $888. However, this amount will increase. NFIP has revamped its flood mapping and pricing to make flood insurance premiums more equitable, accurate and sustainable. The average risk-based cost of insurance is about $1,808. While the true cost of flood coverage differs for everyone, policyholders will see their current insurance premium increase yearly until it matches NFIP’s risk-based cost.
Though earthquakes are not covered under a homeowners insurance policy, most carriers offer an endorsement you can add to the policy for an additional cost. If you live in California, you will likely need to purchase a separate earthquake insurance policy. Almost half of the U.S. states are at risk for earthquake damage.
The average cost for earthquake insurance is between $100 and $300 per year. If you cannot afford to replace your belongings or rebuild your home if damaged, it may be a good idea to speak with your insurance agent to discuss earthquake insurance.
A tsunami is a giant wave that can travel far inland, typically caused by earthquakes or underwater volcanic eruptions. Though these devastating waves are not covered by homeowners insurance, you can purchase flood insurance, which will provide coverage for the damage caused by tsunami waves.
A nuclear event or explosion could cause slight damage or completely wipe out your home. Though your homeowners insurance will not cover a nuclear event, plants are required to carry liability insurance to protect the public if they are injured or have property damage.
What to do if you have experienced a natural disaster
Experiencing a natural disaster can be devastating, especially if you have a catastrophic home or personal loss. To prevent damage and stay safe during a natural disaster, have an emergency kit packed and ready to use. Depending on where you live, you can use sandbags and other building materials like plywood to prevent water from entering the house and high winds or debris breaking windows or doors.
It is also a good idea to speak with your home insurance company to determine what type of coverage you have to make sure you are covered for damage caused by natural disasters. If there is damage after a natural disaster, assess the damage, file a claim as soon as possible, keep track of expenses and make temporary repairs if necessary while waiting for the claims adjuster. There are also typically community resources such as government programs and non-profits available and ready to help after a natural disaster.
Frequently asked questions
The best homeowners insurance policy for natural disasters is one tailored to cover your home’s natural hazards risk. Speaking with a professional agent with experience in the hazards your home may be prone to can help you narrow down what additional endorsements you may need. Comparing quotes and coverage options from different carriers may also help you decide on the best company for your coverage needs. While adding coverage will increase the cost of your home insurance, it may be worthwhile for added financial protection.
Standard homeowners insurance policies exclude landslides from coverage since these disasters are considered “earth movement.” However, since landslides are caused by land becoming unstable from erosion instead of seismic activity, it is likely also excluded from your earthquake endorsement or policy. Homeowners who live in regions prone to landslides should speak to their insurance agent about a difference in conditions policy (DIC). DIC policies cover various disasters, such as landslides, earthquakes, mudflows and mudslides.
While they sound similar, insurance companies look at mudslides and mudflows very differently. Both are usually excluded from a standard home insurance policy. However, flood insurance may cover mudflows since they are primarily composed of water mixed with mud. Homeowners who live in high-risk fire areas may want to consider flood insurance since mudflows are common after wildfires are extinguished. Mudslides are a type of landslide. Instead of being composed of mud and water, like a mudflow, mudslides are fast-moving landslides formed of land, debris, mud and some water. Mudslides are another peril that is usually only covered by a DIC policy.
The Lahaina wildfire resulted from many natural hazards causing a natural disaster. The original fire started from damaged power lines. However, the speed and intensity of the fire were drastically increased due to the drought Hawaii is experiencing and the winds from a hurricane passing near the island. Since most homeowner policies include fire damage as a covered peril, it is likely that most homeowners who had an active insurance policy at the time would have coverage.