Know your insurance policy

Homeowners insurance protects you financially against covered damages to your home and personal belongings. In some instances, home insurance can also protect you from financial liability for injuries to others that occur in your home, as well as additional living expenses should you need to temporarily relocate after damage. There are several policy types offered for home insurance. No policy covers all natural disasters, and some have more restrictions than others.

It is important to understand which policy type you have and what natural disasters your homeowners insurance policy covers. All policy types can have exclusions, especially if you live in an area prone to certain kinds of natural disasters, so you may want to discuss your policy with your provider to see what is excluded from your policy and if you need to purchase additional coverage.

  • HO-1: The most basic form of homeowners insurance. Coverage is limited to your home itself, attached structures and appliances when damaged by named perils, typically including an explosion, fire, lightning, hail, windstorms, and volcanic eruption. An HO-1 does not include coverage for personal belongings.
  • HO-2: Also known as broad form, HO-2 policies cover everything HO-1 policies cover plus personal belongings. The policy type also typically adds a few named perils, including damage from ice, snow or sleet and freezing pipes.
  • HO-3: An HO-3 policy is the most standard type of home insurance coverage and covers everything an HO-2 policy covers, plus some liability, additional living expenses and medical payments. HO-3s are usually open perils policies, which means the structure of your home is covered for any type of damage except exclusions named by your provider. Your personal belongings will typically only cover named perils under this type of policy.
  • HO-4: An HO-4 is another name for renter’s insurance and typically covers your personal property from named perils and offers some liability coverage. In some instances, coverage for additional living expenses may also be included. The named perils covered usually provide coverage similar to an HO-2.
  • HO-5: An HO-5 is the most comprehensive homeowners policy and covers everything an HO-3 covers but typically offers higher coverage limits and protects both your home and personal belongings from open perils with some exceptions.
  • HO-6: Also known as condo owners’ insurance, an HO-6 covers named perils that damage anything ‘from the walls in’ inside the unit and offers some personal liability and additional living expenses coverage.
  • HO-7: HO-7 policies cover mobile and manufactured homes and typically offer coverage similar to an HO-3, with open perils coverage for the structure and named perils coverage for personal belongings.
  • HO-8: An HO-8 policy covers homes that are more difficult to replace, such as an older, architecturally significant home that would cost more to repair or replace than the home’s current value. HO-8s include standard coverage for named perils that damage your dwelling or personal property, as well as some coverage for additional living expenses and medical payments.

Which disasters are covered by homeowners insurance

Before you assume you are covered for a natural disaster, consult your home insurance agent to be sure. The type of homeowners, condo or renters insurance policy you have matters, and so do the coverage limits you choose.

Tornadoes

Tornadoes can cause damage to your dwelling and personal property with high winds, hail, flying debris and fallen trees. Most dwelling and personal property coverage will protect you financially from these types of damage. For instance, if wind or hail damages your roof and it causes rainwater to damage your home, you should be covered unless your policy excludes these perils. Some areas prone to tornadoes may require separate deductibles for wind or hail, called disaster deductibles. Flood damage resulting from a tornado is not covered under any standard homeowners insurance policies but would be covered under a separate flood insurance policy.

Hurricanes

Like tornadoes, hurricanes can cause both damage to the dwelling structure and personal belongings. Hurricane damage caused by wind and hail is typically covered, though there may be limited coverage or a separate, higher deductible if you live in a coastal area. Again, flood damage is not covered unless you purchase a separate flood insurance policy.

Fire

Under a standard homeowners insurance policy, your dwelling and personal property are both covered if a fire causes damage. There are typically not any restrictions except for your policy limits unless you live in an area prone to wildfires or the fire was intentionally set. Tear-down and removal of damaged materials and belongings are also covered. High-value items like jewelry and fine arts may have limited or no coverage if they are not scheduled property.

Explosion

If something explodes in or around your home, it is typically a covered peril. Your dwelling and personal property coverage should both pay if either is damaged because of an accidental explosion. An explosion caused by riot or civil commotion should also be covered.

Lightning

A lightning strike could cause a fire, damage your home wiring or create a surge that ruins expensive electronics. Standard homeowners insurance coverage typically provides coverage for your dwelling and personal property, even if lightning strikes a tree and damages your home or belongings. The cost to remove the tree may not be covered, though, so be sure to check your homeowners insurance policy.

Volcanoes

A volcanic eruption could also produce ash, dust, lava flow and shock waves. Homeowners insurance will usually cover damage to the dwelling and personal property. A resulting explosion or fire should also be covered. Earth movement, landslide, tremors, mudslide or earthquake caused by a volcano is not usually covered under homeowners insurance.

Extreme cold

Most standard homeowners insurance policies cover the dwelling and personal belongings if they are damaged because of extreme cold. If a pipe bursts due to the cold, the pipe may not be covered, but the damage it causes should be. Damage caused by the weight of ice, snow or sleet and wind-driven freezing rain or snow is also usually covered if it damages the home or your personal property. If melting ground snow seeps into the home and causes water damage, that is usually not covered and would instead fall under a separate flood insurance policy.

Which disasters are not covered by homeowners insurance

Though most natural disasters are covered by homeowners insurance, there are a few that are not covered.

Floods

Flood coverage is excluded from all types of homeowners insurance policies. Climate change has caused devastating flood events to happen more frequently across the country, especially in recent years.

Homeowners can purchase flood insurance from their insurance agent as a separate policy or directly through the National Flood Insurance Program (NFIP). From 2010 to 2018, the average flood claim paid by the NFIP was $45,925. The cost of flood insurance varies by state and where your home lies on the flood risk map. Coverage costs can range from $600 to more than $1,200 per year.

Earthquakes

Though earthquakes are not covered under a homeowners insurance policy, most carriers offer an endorsement you can add to the policy for an additional cost. Almost half of the U.S. states are at risk for earthquake damage.

The average cost for earthquake insurance is between $100 and $300 per year. If you cannot afford to replace your belongings or rebuild your home if damaged, it may be a good idea to speak with your insurance agent to discuss earthquake insurance.

Tsunami

A tsunami is a giant wave that can travel far inland, typically caused by earthquakes or underwater volcanic eruptions. Though these devastating waves are not covered by homeowners insurance, you can purchase flood insurance, which will provide coverage for the damage caused by tsunami waves.

Nuclear event

A nuclear event or explosion could cause slight damage or completely wipe out your home. Though your homeowners insurance will not cover a nuclear event, plants are required to carry liability insurance to protect the public if they are injured or have property damage.

What to do if you have experienced a natural disaster

Experiencing a natural disaster can be devastating, especially if you have a catastrophic home or personal loss. To prevent damage and stay safe during a natural disaster, have an emergency kit packed and ready to use. Depending on where you live, you can use sandbags and other building materials like plywood to prevent water from entering the house and high winds or debris breaking windows or doors.

It is also a good idea to speak with your home insurance company to determine what type of coverage you have to make sure you are covered for damage caused by natural disasters. If there is damage after a natural disaster, assess the damage, file a claim as soon as possible, keep track of expenses and make temporary repairs if necessary while waiting for the claims adjuster. There are also typically community resources such as government programs and non-profits available and ready to help after a natural disaster.