Home insurance is a way to protect your home and other belongings from damage, and it protects you financially in case something happens like fire, theft, or vandalism. But does home insurance cover natural disasters? And what do people mean by “natural disaster”?
A natural disaster is generally defined as an event outside of human control, like a hurricane, tornado, earthquake, or forest fire. Home insurance typically doesn’t cover damage caused by these types of events. They’re considered “acts of God” and are therefore uninsurable. However, some home insurance policies offer limited coverage for certain types of natural disasters. For example, you might be covered for wind damage from a hurricane if your policy includes “windstorm insurance.” And you might be covered for earthquakes if you live in an area where this type of coverage is available. It’s essential to read your home insurance policy carefully to see what’s included and what’s not. Otherwise, you could be left with a hefty bill if your home is damaged in a natural disaster. If you’re concerned about being protected from damage caused by a natural disaster, you may consider purchasing additional insurance coverage. For example, you could buy flood insurance or hurricane insurance. These policies will cover you if these specific events damage your home. You can purchase them through the National Flood Insurance Program or private insurers.
No one likes to think about their home being damaged or destroyed. But it’s essential to be prepared for anything that might happen.
Even if there are no lions, tigers, or bears in your neighborhood, your home could be damaged by a tornado, fire, or flood. While comparing estimates, you may question, “Does home insurance cover natural disasters?” whether you’ve just bought your first home or are ready to upgrade your policy.
What Are the Natural Disasters that Can be Covered?
Your homeowner’s insurance policy may cover the following types of unexpected incidents:
- wildfires and other types of fire
- Storms, tornadoes, and hurricanes are examples of wind-related weather.
- theft and vandalism caused by ice and hail, water damage to your home from the inside (for example, from a broken pipe)
Types of Home Insurance Policies
You’ll need to figure out what form of policy best meets your needs after your insurance company has determined the value of your property.
Which hazards you’re protected against depends on the sort of insurance policy you have. The following are the most common types of home insurance policies:
Insurances in Various Calamities
- Earthquake insurance: Most types of damage caused by earthquakes are not covered by standard home insurance plans.
If your insurer offers earthquake insurance, you might be able to add coverage for earthquake damage to your policy as an add-on for a fee. Endorsements, riders, and extensions are the terms used by insurance carriers to describe these add-ons.
Earthquake insurance protects your home and contents from damage caused by earth tremors. If you cannot reside in your house as a result of an earthquake, it may also pay additional living expenditures.
Your house insurance coverage may cover some forms of damage caused by an earthquake.
Assume that an earthquake causes a gas line to rupture, resulting in a fire in your home. Your homeowner’s insurance policy may cover the resulting fire damage, and your coverage is determined by the laws of your province or territory. For further information, contact your insurance representative.
Earthquake insurance premiums are typically greater than other types of insurance. The deductible for earthquake insurance add-ons is normally a percentage of the coverage maximum. The deductible amounts might range from 5% to 20% for earthquake insurance. For example, if your earthquake insurance coverage maximum is $500,000 and your deductible is 10%, you’ll be responsible for the first $50,000 of earthquake damage ($500,000 x 10% = $50,000).
If an earthquake damages your home, you may not always be able to collect compensation due to the deductible. Consider the following scenario: you have earthquake insurance with a $50,000 deductible. Your home’s foundation is destroyed during an earthquake, and it costs $40,000 to repair.
- Flood Insurance: Water damage caused by a source outside your property, such as floods, is usually not covered by homeowner’s insurance.
If water enters your home due to an insured risk, you may be protected in some instances.
Consider what would happen if a tree fell on your roof during a downpour, causing water damage inside your home.
Flooding can occur in a variety of ways, including:
- When rivers or lakes overflow their banks due to severe rainfall or melting snow and ice, overland flooding occurs.
- Rain-related flooding occurs when the ground cannot drain correctly owing to severe or prolonged rain.
- Flash floods occur rapidly as a result of hurricanes and other violent storms.
Some insurance firms provide flood insurance. Overland flood insurance, inland flood insurance, and enhanced water damage coverage are used to describe this coverage.
Flood insurance may be provided for an additional fee to add to your house insurance policy. In comparison to other types of insurance, flood insurance can have a wide range of prices from different insurers. The flood risk level determines the premium amount in your area. Insurance companies may refuse to insure you or charge you a higher premium if you reside in a high-risk location, such as a flood plain. Your deductible and coverage limit may be affected by your risk level.
Flood insurance typically has a larger deductible than many other types of insurance-covered damage. The deductible could be a set money value or a percentage of the claim amount. There is frequently a minimum quantity, such as $1,000. As an example, let’s say your flood insurance policy includes a $5,000 deductible. Your basement has flooded, and the damage will cost $10,000 to fix. The first $5,000 will be your responsibility, and the remaining $5,000 in repairs will be covered by your insurance company. Having emergency savings account on hand can assist you in these instances.
Increasing your deductible with some insurance carriers can help you save money on your premium.
- Avalanche Insurance: Avalanches are a rare natural disaster, but they kill 45 people in North America each year. Most homeowner’s insurance plans don’t cover avalanches; however, they may be covered if you have flood insurance. If the damage was caused by the weight of ice or snow, such as a fully collapsed roof, it is more likely to be covered.
To Sum It All Up
Natural disaster insurance in Canada usually has a larger deductible than other types of insurance. For example, wildfire damage coverage may have a deductible of CAD 50,000, while the typical claim for wildfire damage maybe $400,000. It also depends on your exact policy and add-ons for how it is paid out. If you’re willing to pay higher premiums, you can sometimes lower your deductible, but you should always check with your insurance specialists to make sure you’re covered.