How Home Insurance Covers Natural Disasters

After a disaster, many homeowners are surprised when their insurer denies or reduces a claim. Keep reading to discover everything you need to know about how home insurance covers natural disasters – and how to protect your home against natural disasters.

Basic Home Insurance Covers Most Natural Disasters

Most home insurance policies cover natural disasters like:

• Tornadoes
• Hurricanes
• Fires
• Lightning
• Explosions
• Volcanoes

If you live in a disaster-prone area of the country, then your home insurance policy should protect against most common perils in the region.

Most Policies Do Not Cover Floods or Earthquakes

Basic home insurance covers the perils listed above, but it does not protect against floods and earthquakes.

In fact, no normal insurance policy includes flood coverage by default. Instead, property owners need to buy flood insurance through FEMA, or a FEMA-partnered insurer, to protect homes and businesses against flood damage.

Flood insurance is particularly important when living in low-lying areas, like Florida, North and South Carolina, and parts of the Gulf Coast. However, flood insurance can be important in any coastal area or for anyone living along a flood-prone river.

Most homeowners insurance policies also do not include earthquake damage. If you live in an earthquake-prone area – like many parts of California – then you may want to buy added earthquake insurance.

Tornado Damage

Tornadoes can occur in all 50 states. Each year, approximately 1,200 tornadoes hit the United States.

Fortunately, a standard homeowners insurance policy covers tornado damage.

Home insurance includes coverage for wind, rain, and debris damage up to the limits of your policy. As long as you have sufficient coverage based on the value of your home and your possessions, your insurer should compensate you for any damage after a tornado.

However, standard insurance policies will not cover flood damage linked to the tornado. If the tornado destroys a water reservoir outside of your home, for example, and rising floodwaters destroy your basement, then insurance will typically not cover this damage – unless you have flood insurance.

Hurricanes

Insurers cover hurricanes like they cover tornadoes. Your wind, rain, and debris coverage will protect you against most hurricane damage.

Your insurance should cover your home and your possessions up to the limits of your policy. It should also cover additional living expenses, including costs you incurred as a result of the hurricane (say, if you need to leave your home and stay in a hotel for a few days).

However, hurricane coverage doesn’t cover water damage from flooding. As hurricanes become more common, it may be important to add flood coverage to your policy.

Your insurer could also deny claims if you update your policy too late. You cannot update your policy with added coverage or flood insurance after the storm has been named, for example.

Fire

All standard homeowners insurance policies cover fires, including fires started by natural disasters and accidental fires in your area.

However, your home insurance policy will not cover damage from intentional fires or fires caused by gross negligence. If you started a bonfire on your deck, for example, or asked a friend to burn down your property, then you are likely to have a fire damage insurance claim denied.

A standard homeowners insurance policy covers your dwelling, personal property, liability, and additional living expenses up to the limits of your policy.

According to the National Fire Protection Association, firefighters responded to 1.4 million fires in the United States in 2020. These fires caused $21.9 billion in property damage, and 26% of fires occurred in residential homes. All good home insurance policies need adequate fire coverage.

Lightning

Lightning can cause severe damage if it strikes on or around your property. Fortunately, a standard homeowners insurance policy covers lightning strikes and the resulting damage.

Lightning can damage your home with a direct strike, where lightning strikes or enters your home and causes damage.

Lightning can also damage your home with a near miss. The lightning strike missed your home but still caused damage. In this situation, the insurer may investigate to verify that lightning caused the damage (not a blown transformer).

Lightning can also cause a ground surge, which is a spike of electricity caused by lightning. Proving this damage to your insurer can be difficult, but insurance should cover damage caused by a ground surge.

Extreme Cold

Home insurance covers damage that occurs to your property because of extreme cold. However, you have a responsibility to maintain your home at a comfortable temperature to prevent frozen or burst pipes.

Extreme cold can lead to frozen pipes that burst and cause significant water damage. Home insurance should cover burst pipe insurance claims. However, if your insurer determines a lack of maintenance caused the burst pipe to freeze, then they could deny your claim.

Extreme cold can also lead to:

• Snow and ice accumulation on your roof and gutters, which should be covered by homeowners insurance
• Falls on frozen driveways, including any lawsuits and medical bills resulting from a fall

As long as you’ve performed all due maintenance on your home, home insurance should cover you for extreme cold damage.

Explosions

Explosions aren’t as common as other disasters on our list, but they still occur every year.

Explosions can occur because of a gas leak or an incident at a nearby home or business.

Home insurance should cover the cost of repairing your property and possessions after an explosion. As long as you did not intentionally set the explosion, insurance should cover you.

Volcanoes

Most Americans go to sleep every night without worrying about volcanoes. However, there are 161 potentially active volcanoes in the United States.

If you live in Hawaii, Alaska, and parts of the West Coast, then an active volcano could cause significant damage to your home.

When Mount St. Helens erupted in 1980, it caused around $860 million in damages, making it the most destructive volcano in United States history.

Fortunately, insurance should cover damage from volcanoes.

However, residents of Hawaii (particularly the Big Island) may have different coverage options depending on their lava-flow hazard zone.

Insurance policies may also exclude some damage resulting from a volcano, including mudslides and earthquakes.

Natural Disasters Not Covered by Home Insurance

Home insurance does not cover two main types of natural disasters, including floods and earthquakes.

Floods

Floods can occur for a variety of reasons, including:

• Tornadoes and hurricanes causing waters to rise
• Storms and heavy rains overflowing the rivers, creeks, and lakes near you
• Other natural disasters blocking drainage systems, causing water to enter your home

In all of these situations, a standard homeowners insurance policy would not cover the loss.

In fact, one of the biggest sources of insurance claim disputes is in how damage occurred to your home after a loss. Your insurance may cover hurricane damage but not flood damage, for example. Your insurer may argue that the damage occurred because of flooding (which isn’t covered), while you might insist it occurred because of wind and rain damage (which are covered). In situations with a major insurance dispute like this, you may want to hire a public adjuster.

If you live in a flood-prone area, then consider buying additional flood coverage. FEMA offers flood insurance through the National Flood Insurance Program. Insurers in your area should offer flood insurance through this program.

There’s a 30-day waiting period before flood coverage begins. Don’t wait until hurricane season before adding flood coverage to your policy.

Earthquakes

Standard home insurance does not cover earthquakes. However, if you live in an earthquake-prone area, then you may be able to add earthquake insurance to your policy.

In California, for example, the California Earthquake Authority provides earthquake insurance to residents of high-risk areas.

Similarly, standard home insurance typically does not cover damage resulting from an earthquake, including landslides, mudslides, and tsunamis.

Other Natural Disasters

Other natural disasters that usually aren’t covered by a standard home insurance policy include:

• Sinkholes
• Tsunamis
• Landslides and mudslides

Final Word

Check your policy today. You may be surprised by what’s included and excluded.
Don’t wait until it’s too late. Many homeowners don’t realize they lack flood coverage, for example, until a flood has already destroyed their home.

Stephanie Corona

Stephanie is a property insurance claim expert with over 20 years of experience working as an insurance adjuster, expert witness, appraiser and umpire. She is passionate about sharing her expertise, knowledge, tips and training to help both property owners and Public Adjusters in their pursuit of effectively managing claims and recovering the claim settlement they deserve after a loss.