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When it comes to disasters, are you covered?

Homeowners insurance policies protect against damages that result from certain circumstances, which insurance companies usually refer to as perils. Floods and earthquakes aren't usually covered in standard homeowners policies. There are also limits to how much your insurance company will pay, depending on the terms of your policy.

So, do you have the proper coverage?

Which policy covers what?


What's covered


Dwelling and contents from 11 types of perils: fire or lightning; windstorm or hail; explosion; riot or civil commotion; aircraft; vehicles; smoke; vandalism or malicious mischief; theft; damage by glass or safety glazing material that is part of a building; volcanic eruption.

Homeowners (older homes)

Dwelling and contents from 11 types of perils listed above, but only for repairs, not for replacement cost. Usually written for homes with historical value that would be impossible to replace.


Dwelling and contents from 17 types of perils: the 11 covered by HO-1 and HO-8 plus falling objects; weight of ice, snow or sleet; three categories of water-related damage from home utilities or appliances; and electrical surge damage.

Homeowners (Broad Form)

Dwelling and contents from 17 perils listed in HO-2, plus any other peril not specified in the policy, except for flood, earthquake, war and nuclear accident.


Personal property from 17 perils listed in HO-2.

Condo owners

Personal property from 17 perils listed in HO-2.

All of the policy types listed above include liability coverage. All of them exclude earthquake and flood coverage, and windstorm coverage may be excluded in some areas.

Coverage for various perils will vary depending on what kind of policy you have and where you live.

The insurance needs of homeowners, renters and condo owners differ, so their policies follow suit. Homeowners policies usually include coverage for the dwelling and its contents. Renters and condominium owners policies only cover the contents. The landlord or condominium association usually has a separate policy that covers the building.

The three most popular types of home insurance policies vary in terms of the perils they cover. The policy explanation chart illustrates those differences.

In general, windstorms are covered in even the most basic of home insurance policies. If you live in a coastal area where windstorms and hurricanes can do a lot of damage, you might have to buy an additional policy to cover wind damage.

Then there are two perils that no regular homeowners insurance policy will touch: earthquakes and floods.

Earthquake insurance

When you think about “earthquakes,” odds are California comes to mind. Yet, fault lines are found across the United States.

The New Madrid Fault, which runs through Arkansas, Kentucky, Missouri, and Tennessee, also has insurers worried. According to the Insurance Information Institute, there's a 40 to 63 percent chance the region will suffer an earthquake with a 6.0 magnitude in the next 15 years. The availability of earthquake coverage has become an issue in some regions of those states.

With earthquake insurance, it's important to consider what's covered and how much it costs. Obviously, you'll get a better deal on earthquake coverage if you live in Illinois than if you live in California.

Many homeowners, condo owners and apartment dwellers opt out of such protection. “In California, where earthquake fears are a daily fact of life, only 17 percent of homeowners, and 20 to 25 percent of people in all types of housing, have earthquake insurance,” says Terry Moore of Barney & Barney.

Flood insurance

Aside from fire, flooding is the most common and widespread of natural disasters. Standard home insurance policies will not cover flooding.

The federal government has established the National Flood Insurance Program (NFIP), a partnership between local communities and private insurance companies. NFIP is administered through the Federal Emergency Management Agency.

Because of the way the program works, you don't need to go directly to NFIP to get a flood policy. It's possible the same agent who writes your auto or home insurance can write your flood policy. If that's not the case, you can call NFIP's consumer line at (800) 427-4661 for a referral to an agent in your area.

NFIP recommends getting flood insurance, even if your risk is relatively low. “The fact that a flood hasn't occurred within memory doesn't mean one won't happen soon,” NFIP warns.

Windstorm insurance

Windstorms are a peculiar kind of peril. In inland areas, it usually means fallen branches or loose shingles. The windstorms that blow in off the Atlantic Ocean can cause major damage — especially in coastal areas.

In 1992, Hurricane Andrew cost the insurance industry more than $15 billion and pushed a number of insurers into bankruptcy.

Insurance companies tend to pull out of markets where they're taking a lot of losses, and that's bad news for consumers. Since insurance is regulated at the state level, each state handles such problems differently.

Some states set up Market Assistance Programs (MAP). MAPs act like matchmakers between consumers and insurance companies who want to cover homes in coastal areas.

When MAPs don't work, states set up beach and windstorm plans. In these states, homeowners who live in coastal areas have to buy separate policies to get coverage for windstorm losses.

Seven states have some sort of windstorm pool: Alabama, Florida, Louisiana, Mississippi, North Carolina, South Carolina, and Texas. If you live in one of these states, chances are good you can purchase a wind policy from the same agent who handles your home insurance. If not, your state insurance department can help.

Read the fine print

Considering most homes in coastal areas will also need flood insurance, those homeowners might need three policies: a basic homeowners policy, a flood policy, and a wind policy.

When it comes to insurance, knowledge is power. It's very tempting to just write the check and sign the form, but it's also important to know whether your policy will really pay when disaster hits.

Make sure to ask your agent if windstorm coverage is included in your policy. If it's not, think seriously about purchasing a windstorm policy, or looking elsewhere for a policy that includes the windstorm peril. Likewise, take stock of your situation and the likelihood of your suffering a loss from a flood or an earthquake.

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