What Homeowners Insurance Doesn’t Cover

If you are like most people, you want to do whatever you can to keep your homeowners insurance premium as low as possible. One of the very best ways to do this is to exclude any form of coverage option that is not absolutely necessary. Unfortunately, many people do this with two MEGA potential hazards, only to find out after the fact that it’s too late to do anything about them.

Earthquake Insurance

The vast majority of people in the United States do not live in earthquake prone areas, and will not be required by their mortgage lenders to have insurance coverage for it. And considering that earthquake insurance can be extremely expensive, it’s perfectly understandable that anyone would want to opt out of having it if they don’t absolutely need it.

Typical homeowners insurance policies, however, do not cover damage from earthquakes, EVEN if you do not live in an earthquake prone area and are therefore not required to have the coverage. Should an earthquake hit your area and do significant damage to your property, you would have to pay for the repairs out of your own pocket.

Flood Insurance

Just as is the case with earthquake insurance, flood insurance is an entirely separate policy of its own. It is not part of an earthquake policy, nor is it covered under your homeowners insurance.

Unless your property is located in an area that is a designated flood zone, you’ll not be required to have the coverage by your mortgage lender. And most people would just as soon not have it as a way of reducing the cost of carrying the home. Like earthquake insurance, flood insurance can be expensive.

Why You Might Want Coverage Even If You Don’t Live in an Area Prone to Either Disaster

If you’ve been reading the headlines the past few years, you probably have a strong sense that natural disasters are occurring in places where they haven’t in the past. Both flooding and earthquakes seem to be becoming increasingly common, even in areas that were traditionally thought to be immune to these problems.

But if you live in an area that does not have flooding or earthquakes, and one does occur, you should be aware that neither event would be covered under your homeowners insurance policy. You have just two options as far as remuneration: disaster relief from the US government (typically in the form of FEMA), or paying the damages out of your own resources.

Government aid is, of course, the preferred source, but you are probably aware that that vehicle is imperfect, takes much longer than anyone thinks that it should, and sometimes comes with stiff requirements. There may also be certain exclusions that would make it impossible for you to be reimbursed for your loss at all.

Complicating the government as a source, is the fact that it will only be available if the area that you are living in is declared to be a disaster area. That will generally be the case in the event of an earthquake or a major flood, but it is possible for a single neighborhood or even an individual home to sustain substantial flood damage that will not rise to the level of an area-wide declaration of disaster. If that’s the case, there will be no aid coming from any source.

This is a nightmare scenario of course, but one that should lead you to give serious consideration to obtaining both flood insurance and earthquake insurance, even if you’re not living in an area that is prone to either disaster.

The Good News on Earthquake and Flood Insurance

No one wants to pay an expense if they don’t absolutely need to. But, if you are interested in getting earthquake and/or flood insurance, the good news is that neither are very expensive if you are not living in an area where they are common!

In these areas, for just a few dollars a month, you can insure your home against these mega disasters that will not be covered by your homeowners insurance. While it’s true that neither event may be terribly likely to happen, the fallout if they did could be a total disaster for your home and your finances.

A small amount of money invested in the coverage for either disaster can be some of the best money ever spent. You’ll be covered in the event that the worst happens, and you will not have the variables involved in waiting on FEMA to come to your rescue.

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