Ronda-isms: Good-Bad-Ugly™

Due to climate change, we are seeing an increase in the frequency of natural disasters, sometimes in areas where they haven’t occurred before. It’s important for homeowners in disaster-prone areas to have the proper coverage in case of floods, tornadoes, hurricanes, earthquakes, mudslides, and wildfires.

If you have homeowners insurance, you have coverage to protect damage to your home from covered events known as insurance perils. But there are limitations to that coverage that may require add-on or separate coverage.

And as for damage to your car due to a natural disaster, it won’t be covered under homeowners insurance, but if you have comprehensive car insurance you should be covered.

Which natural disasters are covered by homeowners insurance
Homeowners insurance covers your property from damage, referred to as insurance perils. A peril is an event that may damage your home or belongings. There are two types of insurance perils: named perils and open/all perils.

The type of peril coverage you have depends on the type of homeowners insurance you purchased: condo, home, townhome, mobile home, renter, or new construction.

Most homeowners insurance covers named perils, which are events that are specifically listed in your insurance policy. Open/all peril coverage includes named perils and is a more expansive coverage for HO-3 (special) and HO-7 (mobile home) homeowners.

Earthquakes, floods, government seizures, mudslides, ordinance updates, sewer backups and sinkholes are all perils that won’t be covered by homeowners insurance, according to Hippo Insurance. Those will require add-on coverage using a rider policy.

Homes located in disaster-prone areas will have increased premiums because these types of events are not included in basic coverage and will need to be add-on riders.

There are three components to homeowners insurance: dwelling coverage, personal property coverage, and personal liability coverage.

If something happens to your home, you can have it repaired or rebuilt under dwelling coverage. Your dwelling consists of your home and any other structures on the property, like a garage or shed.

Personal property protects your belongings and furnishings from damage or theft. Liability coverage protects you if someone is injured on your property.

*Available as add-on coverage if not part of policy
**Flood insurance is available through the NFIP and approved insurers
***If you live in hurricane or tornado areas, additional windstorm rider may be required

Have an emergency “go bag” ready if you live in disaster-prone areas

If you live an areas where natural disasters regularly occur, it is best to have an emergency go bag packed that includes a thumb/flash drive with all important documents scanned (birth certificates, copies of passport, driver’s license, medical records, estates documents, photos, etc).  Have a first aid kit and a list of your medication with a supply to last at least a week.

Emergency Readiness Supplies from NYC Fire Dept

Hurricane insurance coverage
Hurricane insurance refers to the coverage necessary to cover hurricane damage. A hurricane has to be a declared event, which is dictated by an announcement from the National Hurricane Center.

Hurricanes cause flooding and high winds that can damage homes. Damage to your home from winds is usually covered under your homeowners insurance. However, high winds are excluded and if you live in hurricane zones or coastal areas, you may be required to get an add-on windstorm rider.

Homeowners insurance covers water damage, but not flooding. Proper hurricane insurance requires a combination of homeowners and flood insurance. If you live in certain states, you may also need additional coverage for windstorm damage.

Flood insurance coverage
Flood insurance is in addition to your homeowners insurance policy to cover flood-related damage. Flood insurance is required if you are in a high-risk flood zone. A flood is defined as surface water entering the inside of your home structure through existing openings that are above ground level.

Flood insurance specifically excludes water damage from sump pumps, sewer water, broken pipes, rain from an open window, and rain from windstorms.

“Flooding is one of the most common and costly natural disasters in the US, and given we are in the midst of an above-average hurricane season, consumers need to ensure that they will not be left exposed if their homes are hit hard by a storm,” said Ralph Blust, CEO of the National Flood Services. NFS administers flood insurance on behalf of FEMA and the National Flood Insurance Program (NFIP).

Blust said Hurricane Harvey’s damage to Houston was five miles off the coast, where it had never flooded in the past five years and most of those homeowners didn’t have flood insurance.

Homeowners who live outside of high-risk flood zones and do not have flood insurance will pay for damage out-of-pocket because flood damage isn’t covered under homeowners insurance. According to Blust, one inch of flood damage alone can cost a household up to $20,000.

Tornado insurance coverage
Tornado insurance refers to the coverage necessary to insure against damage caused by tornadoes. Tornadoes typically cause damage through winds and hail, though water damage can occur as well.

Although standard homeowners insurance covers wind and hail, it doesn’t cover extreme hail or high winds like those from tornadoes. If you live in an area where tornadoes are common, you may need additional windstorm insurance.

Earthquake insurance coverage
Although earthquakes are common in California, earthquake insurance is not required for California homeowners. However, “if you have homeowners insurance in California, your company must offer to sell you earthquake insurance,” according to the California Department of Insurance.

“Earth movement” coverage refers to shifts in land resulting from an earthquake, according to Steve Wilson, senior underwriting manager at Hippo Insurance. Aftershocks happen after an earthquake and can occur over a period of time up to 72 hours.

For homeowners who live in areas where earthquakes are rare, Wilson said most homeowner policy language offers coverage for “resulting damage.” For example, in New York City, earthquakes aren’t covered but if the earthquake caused a fire, damage from the fire will be covered.

It’s best to talk to your homeowners insurance carrier to determine if you need “earth movement” coverage or if standard homeowners insurance is enough.

Wildfires and mudslides insurance coverage
Homeowners insurance covers fire damage. However, if you live in areas where wildfires are common, Wilson recommends getting a rider for extended replacement cost coverage under your dwelling coverage because material costs go up after a wildfire.

Wilson said after a wildfire there are no more trees, so mudslides are a potential peril. However, mudslides and landslides are not covered under homeowners or earthquake insurance. There is a difference between landslides, mudslides, and mudflow.

Mudflow is when heavy rains create a river of mud. Mudflow is covered under flood insurance. Flood insurance can be purchased separately from FEMA’s National Flood Insurance Program or private insurers.

“Mudslides occur when a mass of earth or rock moves downhill [but they] don’t contain enough liquid to seep into your home, and aren’t eligible for flood insurance coverage,” according to the Insurance Information Institute. In fact, mudslides are not covered by any policy.

Landslides are the rapid movement of rock or earth usually as a result of water erosion. Although landslides are earth movements, they are not covered under earthquake insurance.

Coverage from mudslides and landslides require a “Difference in Conditions” (DIC) policy that usually “offers all-in-one coverage for landslides, mudflows, earthquakes, and floods and are sold by surplus lines insurers,” according to the Insurance Information Institute.

Understand how your deductible impacts your claim
A deductible applies every time you file a claim and only to property damage (dwelling and personal property coverage), not personal liability coverage. The deductible is subtracted or deducted from your claim payout.

Your deductible can be a dollar amount or a percentage. The Insurance Information Institute noted that the standard homeowners deductible is typically between $500 to $1,000. The declarations page of your insurance policy will state your deductible amount and whether it is a percentage or dollar amount.

Will homeowners insurance cover relocation
“Loss of use” coverage, also known as “additional living expenses” or ALE, is included in most homeowners and renters insurance policies and provides reimbursement for temporary housing when a peril causes damage that makes your home or rental unit inhabitable.

For “loss of use” and “additional living expenses,” much depends on your insurance carrier and it varies by provider. Some carriers will reimburse you for temporary housing. Others may have a list of housing alternatives.

Ashlee Tilford, managing editor for Insurance.com, told Insider that most homeowners have a misconception of what constitutes “inhabitable.” Don’t assume that your insurance carrier will pay additional living expenses, because the definition of inhabitable varies by company.

If you’re considering leaving your home due to damage, contact your homeowners or renters insurance provider first and take detailed pictures of the damage. Make sure to lock up and secure the premises as well.

Tips to prepare your home in the event of a natural disaster
Hippo Insurance’s Wilson recommends taking the following steps to make sure you’re prepared if a natural disaster does happen.

1. Review your homeowners insurance annually with your carrier to make sure you have proper coverage for your region.
2. Have an evacuation plan on where to meet and what time ahead of a disaster and communicate that with family members.
3. Have a small bag with medication, flashlight, and batteries for three days.
4. Have temporary repair equipment available like a tarp.
5. Contact your homeowners insurance carrier if a natural disaster announcement is declared.
6. Prevent damage by doing home maintenance looking for weak points — under sinks, gutters, shingles, debris around the foundation — and signs of wear and tear.

Emergency Go Bag from NYC Fire Dept

What to do if you experience damage from a natural disaster
After experiencing a disaster, Wilson recommends staying in touch with your homeowners insurance company to let them know what’s going on at your home and take the following steps when submitting insurance claims:

1. Contact the insurance carrier to file a claim in a timely manner. For homeowners, your carrier may provide a list of contractors and offer advice on do-it-yourself tips to prevent further damage. If you’re a renter, you should also inform your landlord or property management company.
2. Take pictures of the damage before disposal and cleanup.
3. Beware of price-gouging contractors and door-to-door scammers. Ask contractors for their license and insurance credentials to avoid fraud. If you’re a renter, your landlord is responsible for the building and structure.
4. Prevent further damage to your property.

Don’t do something you’re not comfortable with/that doesn’t look safe. Homeowners insurance has a condition to prevent further loss. Focus on a temporary fix instead of something long-term so insurance can properly access a permanent fix by a professional.

Claims as a result of a catastrophic event generally take longer and claimants can expect delays.Through FEMA, the federal government offers resources for disaster-stricken areas. You can find information about financial assistance on the USA government website.

There are also resources from relief organizations like the Red Cross. 

What questions should I ask contractors
During a disaster, most homeowners insurance companies are scrambling for the same resources — contractors, electricians, and plumbers — which is why it is hard to get them on a service call.

Before hiring a contractor, contact your homeowners insurance company — they may have a list of approved contractors. Make sure that your company will pay for the contractor before signing a contract.

When calling for contractor estimates, ask how far out they are booking for repairs to get an idea of how long it will take before repairs begin.

Renters should address any building and structural damage with their landlord or property management company, because it’s the owner’s responsibility. Renters insurance covers your belongings in the rental unit.

Avoid cold callers and door-to-door scammers
It isn’t unusual for contractors working on a neighbor’s property to knock on other doors in the neighborhood to see if they need assistance. However, use good judgment and make sure they are actually hired by your neighbor. Ask for license and insurance credentials from any contractor going door-to-door.

Some scammers cold-call homeowners asking to switch homeowners insurance providers. If a cold caller is offering to pay for damage to your home if you switch providers or saying “take this deal today because it won’t be available tomorrow,” it’s probably a scam. 

Ronda Lee

Founder, Editor-in-Chief
Ronda is an attorney, writer, and entrepreneur. She is a contributing writer for the Huffington Post. Originally from Chicago, she has lived in Los Angeles and New York. She loves to travel and is passionate about education equity, especially for first generation college students.