|
Site Search
Site Sponsors
Most Popular
Google Maps
Satellite Images
US Geology & Maps
|
Home »
Geology Articles » Homeowners Insurance
The Typical Homeowners Insurance Policy
Does Not Cover Many Natural Hazards
 |
"All Perils" Means: Learn About the Geology
Every year in every state many property owners discover that their
homeowners insurance policy will not pay when their homes are damaged by common geological processes
such as floods, earthquakes and landslides. When purchasing
these policies the same homeowners probably had the impression that their "All Perils" insurance
policy would pay for almost any type of damage that their home would experience.
I felt the same way when I purchased my first homeowners insurance policy. I distinctly
remember the agent telling me that it was an "all perils" policy and feeling
good about that. I didn't read the policy word-by-word. A few years later my work as a geologist brought me in contact with lots of
homeowners who were unable to collect when their homes were damaged by floods, landslides,
subsidence and other problems. I was surprised at how many people received this rude insurance awakening.
At first I blamed it on "cheap insurance".
One day my insurance company mailed me an updated policy and I decided to spend a little time reading it.
Sure enough, the policy had a very clear exclusions
statement. The list of exclusions was almost identical to the topics list of an environmental geology textbook. I
have since looked at the exclusions statements from many homeowners insurance policies and my personal conclusion is that
the typical homeowners insurance policy provides protection against fire and maybe falling objects and wind. It also offered limited personal liability protection.
The lesson to be taken away from this is: "Learn about the geology before you buy the house". If the home has some
geological risk you should not buy it. Or, you should know exactly what your risks are and either find specific insurance
to cover then or live in the house informed of your exposure.
Below I have done my best to summarize what many homeowners policies do not cover and provide links to more detailed information. More detailed learning for these topics can be obtained by reading an envirnomental geology book or taking a university course.
For site-specific information you can contact a consulting geologist or the geological survey
that serves the area where the house is located.
I invite feedback on this information, input on how it can be improved, or links to excellent sources.
Sources of Expansive Soils Information |
|
|
|
Expansive Soils and Homeowners Insurance
In a typical year in the United States, expansive soils cause more damage to homes than earthquakes, floods, hurricanes and tornadoes combined. Homeowners insurance does not cover damage from expansive soils.
Expansive soils contain a significant amount of clay which can expand when wet and shrink when dry.
These volume changes can damage foundations, underground utilities, sidewalks, driveways and other parts
of a home. The United States Department of Agriculture estimates that one half of the homes in the
United States are built on expansive soils and one half of these will have some damage.
There are certain areas of the United States where expansive soils are beneath much of the land. A general guide to where they are is shown in the map and references at right. In those areas where expansive soils are a known problem professional inspection for possible expansive soil damage should be done before purchasing an existing home and an on-site evaluation could be done prior to property purchase or before beginning new construction.
Sources of Earthquake Hazard Information |
|
|
|
Earthquake Insurance
The typical homeowners insurance policy does not cover damage from earthquakes.
A homeowner who desires this coverage normally needs to purchase a "named perils" policy - an earthquake insurance policy.
One way to do this is to ask your homeowners insurance agent if your policy provides earthquake coverage. If the policy does not then ask where you can
purchase the coverage. Some insurance companies sell earthquake insurance coverage as a supplement to a normal homeowners insurance. In some geographic areas, earthquake
insurance is available through government-sponsored programs such
as the California Earthquake Authority. Many insurance agents can advise on the companies and government programs that offer earthquake coverage in your area.
Another question that many homeowners ask is: "Do I need earthquake insurance?" There
are a few situations where a homeowner is required to have earthquake insurance to comply
with mortgage requirements. However, for most people the answer depends upon where the home
is located and the level of risk that the homeowner is willing to take.
The small maps at right show the geographic variability of earthquake hazard. White areas on these maps have the
lowest hazard and the red areas have the highest. Earthquake insurance is probably a very good idea in the red and
orange areas. If I lived in these areas I would buy the insurance. It is a prudent idea in the yellow areas.
Earthquake hazards are lower in the green, blue and white areas. If you live in one of these areas and want the
peace of mind that you are financially protected in the event of damage then the insurance is a good purchase.
I live in northern Pennsylvania and do not have earthquake insurance - perhaps I will regret
that someday.
Sources of Flood Information |
|
|
|
Flood Insurance
According to the National Flood Insurance Program, floods are America's #1 natural disaster.
They strike every state and almost every community. Homeowners insurance does not cover flood
damage so it is very important to understand the flood hazards at you location and obtain appropriate
insurance coverage if needed.
The Federal Emergency Management Agency provides address-specific flood hazard information at the
FloodSmart website (links at right). There you can type in your address and learn about the specific
flood hazards at your location. They also have information on assessing flood hazard and
purchasing flood insurance.
FloodSmart recommends flood insurance even if you live in an area of low to moderate risk. This is because
25% of all flood insurance claims come from areas with minimal flood risk. Flooding occurs there
during exceptionally large flood events and also as a result of local drainage problems. Purchasing
insurance in these areas is inexpensive - as little as $39/year for contents coverage or $100/year
for building and contents coverage.
Sources of Hurricane Information |
|
|
|
Hurricane Insurance
Homeowners insurance does not cover "hurricanes" per se, instead, the coverage or exclusion
is based upon which element of a hurricane (such as wind or flooding) directly caused the damage.
These issues are not easily resolved and many legal contests continue over who is responsible for certain losses during Hurricane Katrina and many other storms. For example: a house was flooded by storm surge and the homeowner claims that since the surge was produced by wind that the damage should be covered. The insurance company maintains that they do not pay for flood damage. Many of these types of cases - based upon definitions and impacts remain unsettled.
Persons who buy property in areas that might experience hurricanes should learn about the types of hazards that come with these storms and how they impact the specific location where they will live. History is often a very good teacher. For example: if a location was inundated by storm surge in the past then a future inundation will probably occur. Detailed guidance can be found at the websites given above.
Sources of Landslide Information |
|
|
|
Landslide Insurance
Homeowners insurance does not cover landslide damage. Anyone who intends to buy or build a home on sloping land should be cautious about potential landslide problems.
Although landslide problems occur in all 50 states, some areas have a much greater incidence than others. The three factors which determine incidence are: 1) slope steepness, 2) soil strength, and 3) moisture content of the soil. The map at right show areas with a high incidence of landslide problems in brown and red. Persons buying or building in these areas should be especially cautious because of the special conditions which occur there.
The best way to protect yourself is to avoid buying or building in hazardous areas. If you are in doubt have an expert inspect the site and look for building damage that indicates a building under stress. Even if no landslide problems are revealed by the inspection if you have excavation, grading and other fill placed those actions can increase or trigger landslides. Also, landslide damage on adjacent properties is a good indicator that your home might be at risk - and will often result in difficult resale. Always be cautious on slopes and seek expert advice if you are uncertain.
Sources of Subsidence Information |
|
|
|
Subsidence Insurance
Subsidence is not covered by homeowners insurance. The most common and damaging subsidence occurs in
areas with mining below. Here, voids opened during mining slowly or suddenly collapse. This can damage buildings,
roads and utilities above. Your home can be damaged or ruined by this type of subsidence or it can also be condemned - even if it is not damaged. Condemnation occurs when the utility and road
infrastructure of your neighborhood becomes to expensive to maintain and local government refuses to continue providing service. If your home is condemned you are required to move out - even if you own $100,000 on the mortgage.
Mine subsidence occurs where coal or another mineral resource has been removed below the surface. The small map at right and link to the USGS Coal Fields website shows where this most likely to occur. More specific information and underground mine maps can often be obtained by contacting or going to the websites of state geological surveys or mine regulation agencies.
Avoiding properties above mined out areas is the best way to be safe from mine subsidence. However, existing structures over mines can often be insured through state government mine subsidence insurance programs or through supplemental policies from insurance companies. Your homeowners insurance agent should be able to advise you on where it can be obtained or you might contact a government agency in your state to ask.
|
|
