Why California Homeowners Need Supplemental Flood and Earthquake Insurance

sign that reads "earthquake ahead," protect home from flood and earthquake

Homeowners need to secure specialty insurance policies to cover flood and earthquake damages.

When most people think about their homeowners insurance, they think about it protecting against natural disasters, such as fires and storms.  This is why it may be so surprising to learn that certain perils, such as floods and earthquakes, are actually excluded from coverage under your home policy.  Here’s why floods and earthquakes aren’t covered by your homeowners insurance and how you can secure protection against these perils.

What does homeowners insurance cover?

As previously mentioned, home insurance provides coverage for many common damage events.  For instance, the following perils are all covered under standard homeowners insurance policies:

  • Fire and lightning
  • Windstorms and hail
  • Smoke damage
  • Explosions
  • Vandalism or malicious mischief
  • Damage caused by aircraft or vehicles
  • Volcanic eruptions
  • Theft

However, there are certain damage events that are considered too risky and expensive to be covered by standard home insurance.  For instance, because the damage caused by floods and earthquakes is so extensive, these perils are almost always excluded from coverage.  If homeowners want to secure coverage for these threats, they will need to secure specialty flood or earthquake insurance.

Flood Insurance

Most flood insurance policies are administered by the Federal Emergency Management Agency (FEMA).  Insurance providers work with FEMA to offer homeowners access to this coverage in flood-prone areas.  Flood insurance offers coverage for the physical damages and losses caused by floods and flood-related erosion.  This coverage extends to floods caused by heavy rain, dam breaks, clogged storm drains, unusual tide surges, and so on.

The cost of your flood coverage is dependent on several factors.  When determining your coverage rates, insurers will look at the following:

  • The amount of coverage you have purchased
  • The deductibles you set
  • The location of your home
  • The age, occupancy, and structure of your home
  • The elevation of your home’s lowest floor relative to the elevation of the 1% annual chance flood

Earthquake Insurance

Earthquake insurance offers coverage for the damages caused by an earthquake.  This coverage extends to the structure of your home, as well as the personal belongings that may be damaged or lost in a quake. Typically, earthquake insurance is only necessary for homeowners who reside near a fault time or in an area with seismic activity caused by drilling.

Earthquake insurance rates vary widely depending on where your home is located.  Homes in low-risk areas will usually have lower insurance costs.  However, if your home is located near a fault line, then your premiums will be significantly higher.  Your rates may also be higher if the following is true:

  • Your home is older
  • Your home is made of brick (brick is less flexible and therefore has a harder time withstanding the stress caused by an earthquake)
  • You live in a high-value home

This is what you need to know about flood and earthquake insurance.  Do you have additional questions about your homeowners insurance?  If so, then contact the experts at Udell Family Insurance.  We are ready to assist you with all your coverage needs today.

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