The Ins and Outs of Earthquake and Flood Insurance

Extreme weather conditions, like earthquakes and floods, can wreak destruction that ruins lives. Yet, most home insurance does don’t cover these natural phenomena under their cover. That’s why it is so important to ensure you have earthquake and flood insurance, especially if you live in a high-risk zone. 

What Does Earthquake Insurance Cover? 

Earthquake insurance can cover as much or as little as your policy sets out. For the most part, though, earthquake insurance will cover most damages caused by the earthquake. This could be personal belongings or structural issues.

Mostly, though, earthquake insurance helps you to get a roof over your head when an earthquake causes major damage. If you need to stay in a hotel while your home is fixed, your earthquake insurance should cover the cost.

What will your insurance policy be affected by?

The cost and cover of your policy will depend on a variety of factors. For one, the location of your home and the probability of being affected by an earthquake. Another factor can be the material of your home. Houses made of wood withstand earthquakes better than those made of bricks.

What does Flood Insurance Cover?

Flood insurance, much like earthquake insurance, covers damages sustained by floods. Depending on your level of cover, you can have insurance to cover repairs, replacements, and even rebuilds, in the worst cases.

There can be a grey area in terms of what constitutes flood cover. For example, if your home sustains damage due to a sewer backup, you will only receive cover if a flood causes this sewer backup. If not, you are not protected.

Similarly, if your home floods due to water leaking from a pipe, or a pipe burst, your insurance likely won’t cover you. This is because the water has not appeared due to natural forces. Instead, it will be classed as an ‘escape of water.’

What will your insurance policy be affected by?

Again, your cover will be affected by your location and the likelihood of a damaging flood. If you have contents insurance for flooding, the cost will depend on the value of your belongings. Your policy may also be affected by the age, material, and structural features of your home.

Common Misconceptions about Earthquake Insurance

There are a few common misconceptions about earthquake and flood insurance. The most common are:

1. My homeowner’s insurance will cover earthquakes and floods.

This is incredibly unlikely. Sometimes, you can add earthquake and flood insurance to a homeowners policy, but you need to buy the coverage separately a lot of the time.

2. The government will provide aid for an earthquake, so rebuilding doesn’t need to be a worry.

Typically, the government does provide federal aid after an earthquake. But most of this help will be through loans – which you’ll need to pay back.  Relying solely on federal aid can cause you more damage than paying for an insurance policy, so it’s smarter to play safe.

3. Earthquake insurance is too expensive to be viable.

For many years, earthquake insurance was very expensive. However, policies have become more flexible in recent years, so you can pay as much as you want and deduct areas you think would be unnecessary.