Are Mudslides and Landslides Covered by Home Insurance?
Landslides are caused by the movement of destabilized land due to either gradual erosion or a large accumulation of water. Mudslides occur when a mass of earth or rock moves downhill pushed by gravity. Heavy rains cause mudflow, which is basically a river of mud. Having any of these natural events happen near your home would be stressful to say the least. Let’s look at what kind of insurance coverage is available for each event.
No Coverage for Mudslides
Mudslides don’t contain enough liquids to seep into your house as a mudflow could. And they aren’t eligible for flood insurance. In fact, mudslides aren’t covered by any policy, according to the Insurance Information Institute. So if you have damage to your home from a mudslide you will need to pay for the damages out of your own pocket.
Flood Coverage for Mudflow
Mudflow is covered by flood insurance, which is available from FEMA’s National Flood Insurance Program (NFIP) and from some private insurance companies. FEMA is the Federal Emergency Management Agency and this agency supports citizens and first responders following emergencies.
Be aware that flooding is excluded from standard homeowners policies and you must purchase a separate policy for flood insurance. This separate policy will cover mudflow as well so if you live in an area with frequent flooding it is worth buying.
Rider and DIC Policy for Landslides
A standard homeowner policy will not cover damage caused by landslides due to rain runoff, melting snow, flooding and earthquakes. There is a special rider for your homeowners policy that includes coverage for the contents of your home from perils such as earth movement including landslides. But be aware this rider only covers your home’s contents and not the structure of your home. Ask your insurance agent about the costs of adding a rider to your home insurance that would cover landslides.
As mentioned earlier, a landslide is not covered under standard homeowners policy. It is not covered by earthquake or flood insurance. But you can buy a separate policy for coverage for landslides. That separate policy is called a difference in conditions (DIC) policy. This policy covers natural events such as landslides, mudflows, earthquakes and floods. DIC coverage includes structures such as your home and other unattached buildings on your property. These policies are sold by surplus line insurers. Ask your agent for a recommendation.
The surplus lines insurance market sells high-risk insurance that standard insurance companies won’t provide. A DIC policy may be more expensive than a standard homeowners insurance policy. Premiums cost anywhere from a few hundreds dollars to a few thousand. A DIC policy covers the cost to rebuild the home to its original condition. So be sure to have a good understanding of the DIC policy’s price before signing on. There may be a high deductible as well as a high premium. A deductible is the amount you need to pay before your insurance company begins to pay for damages to your home or for losses.
Landslides are infrequent, about 20 to 30 happen per year in the United States. But if you live in a high risk area, it may be worthwhile to add a rider to your homeowners policy or purchase a separate DIC policy. The majority of landslides take place in California, Colorado, Washington, Oregon and North Carolina. If these are your home states, you may want to consider this coverage, especially if you live in an area where landslides occur such as on coastal bluffs and hilly areas with frequent rain.
Not every insurance company sells DIC coverage so be sure to ask your insurance agent for recommendations of insurers selling this type of policy. You also can check with the state department of insurance for a list of companies selling DIC policies.
Beware of buying or building a home on a property that is prone to landslides. Avoid it if you can but if you already did, be smart about insurance coverage and do plenty of research. Shop with SmartFinancial for the best price.
Auto Coverage for Landslide and Mudflow
Comprehensive auto insurance covers fire, theft and vandalism and damages from weather such as a hailstorm, a windstorm, a hurricane and a tornado. Comprehensive auto insurance also covers floods and earthquakes, mudflows and landslides. So if you purchase comprehensive auto insurance your car will be covered for damages for weather and natural disasters.
Comprehensive auto insurance comes with a deductible. Choose an amount that makes sense for your budget. The higher the deductible the lower your premium will be. Whatever deductible that you choose, put the deductible amount into a small emergency fund. This way the money will be there if you should need to make a claim on your auto insurance.
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