What is covered under a standard homeowner’s insurance
policy?
Some natural disasters are always covered by homeowner’s
insurance, including wildfires, tornadoes and hail storms. But other natural
disasters are never or rarely covered under a standard homeowner’s insurance
policy. They generally fall into two categories: floods and “earth movements.”
The first category comprises disasters caused by rising
water, which includes everything from floods caused by extensive rainfall and
hurricane-induced storm surges to dam failures and tsunamis. “Earth movements”
include disasters such as earthquakes, landslides and sinkholes.
Unfortunately, many Americans are unaware that these
disasters are not covered by a standard homeowner’s policy, according to the Insurance Information Institute.
Certain natural disaster typically aren’t covered because of
the level of the destruction they create, said Lynne McChristian, a spokeswoman
for the Insurance Information Institute and executive director of the Center
for Risk Management Education and Research at Florida State University.
With these disasters, “the damage is usually so widespread,
and it’s typically a total loss,” McChristian said. “Insurance companies can’t
price it appropriately to make it a viable line of business for them.”
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