Does My Insurance Cover Every Catastrophe?

 

A standard homeowner’s insurance policy covers damages and losses to your property and possessions. It also provides liability coverage to protect you if an accident occurs on your property.

Does this coverage include every catastrophe that could devastate your home?

No. Two disasters, in particular, are not typically covered by a traditional homeowner’s policy.

The first is earthquakes. These disasters are usually excluded from homeowners’ insurance policies.

To obtain coverage for damage due to earthquakes, you will need to take out a special earthquake policy or add a rider. These often feature a percentage deductible rather than a dollar amount. If you’re not in an area that is prone to earthquakes, don’t stress too much over this coverage. You can probably skip it.

The second catastrophe that is often excluded is flooding. If your property is located in a flood zone, this fact was probably disclosed to you when you purchased the property. It’s common for mortgage lenders to require flood insurance.

If you’re unsure about your property’s flood-zone status, contact your local government officials to determine if your home is in a flood zone. If it is, you will need separate flood insurance. Your insurance carrier may provide this, or you may need to contact the National Flood Insurance Program.

And a third situation has become a more prevalent concern in recent years. Homeowners may wonder if terrorist attacks are covered under their policies.

While most policies don’t mention terrorist attacks specifically under the covered conditions, they also don’t exclude them. Since most policies cover damages caused by fire, smoke, and explosions, terrorist acts are typically covered.

If you’re unsure about your coverage for a specific situation, contact your insurance agent to review your policy. Year-end is a good time to review your coverage and determine if you should make any changes to meet your current insurance needs.