Additional Natural Disaster Coverage You May Not Know You Have
We previously explained that coverage under a homeowners policy is determined by the proximate cause of loss; or, the action that originated the damage. This is whether the claim is related to a natural disaster, or something else altogether.
Assuming you already have adequate coverage in place, though, this article will take a closer look at often overlooked parts of a home policy that could kick in following a natural disaster. But first, let’s discuss the importance of exclusions.
When it Comes to Home & Auto Insurance, Exclusions Aren’t the Exception
According to a 2017 report from ATTOM Data Solutions, only 34 percent of Americans don’t have a mortgage on their home. And since most lenders require that their properties are fully insured, this means the bulk of the remaining 66 percent likely have all-risk homeowners insurance in place.
Basically, these fairly all-encompassing policies stipulate that unless a cause of loss is specifically excluded in the policy language, it will likely be covered—including many related to natural disasters. Common exclusions include:
- Ordinance or law
- Nuclear hazard
- Ground movement
- Wear and tear
- Government action
- Dangerous or aggressive dogs
- Wind damage (in some states)
Although they typically provide broader coverage than homeowners, it’s much the same with auto policies. Disaster-related exclusions include bodily injury or property damage resulting from:
- Nuclear explosion, along with related exposure, contamination, and fire
- Acts of war
- Bio-chemical attacks or exposure
With these high-level details in mind, let’s zoom in and explore different home coverages that are frequently ignored—but that are specifically spelled out in the policy language and could prove useful following a natural disaster.
Additional Natural Disaster-Related Home Coverages
Coverage: Loss of Use (also known as coverage D)
If you lose the use of your home due to a covered loss, your homeowner’s policy could cover added expenses you incur, whether related to hotels or other rental properties, food and utilities, and car mileage. This is referred to as additional living expenses.
You might also have coverage available for loss of rental property income, which is referred to as fair rental value.
Example: You normally spend $500 per week on your groceries, mortgage payment, and gas. After you’re forced out of your home due to a covered loss, this increases to $750 per week, or about $1,000 per month. Your policy could cover this difference.
Tip: If this occurs, be sure to keep all receipts related to your additional living expenses. This will make obtaining reimbursement from your insurance carrier much easier.
Coverage: Debris Removal
Because scattered debris is common after a natural disaster, this coverage might come in especially handy for cleaning up your home and the surrounding area afterward.
Depending on exactly which debris is removed, though, there could be sub-limits in place. Related coverage includes reasonable repairs to the property.
Example: A tornado left wood, siding, roofing, and other housing debris—including trees and other plants—scattered all over your property. If it costs you $1,500 to clean everything up and board up three of your windows to protect against further damage, this could be covered under your homeowner’s policy.
Just keep in mind that most policies have sub-limits in place, such as no more than $500 for the removal of trees, and no more than $500 (up to 5% of the policy limit) for replacing any single tree, plant, or shrub.
Additional Natural Disaster-Related Auto Coverages
As we referenced earlier, auto policies tend to provide broader coverage than home policies, and exclude fewer scenarios. As such, between liability, comprehensive, and collision coverage, a wide variety of circumstances that might arise during a natural disaster are often covered.
Coverage: Some frequently overlooked coverage that might kick in includes uninsured/underinsured motorist (UM/UIM), as well as Personal Injury Protection (PIP) or Medical Payments, depending on your state.
Example: You’re fleeing a natural disaster in your car, and high winds force an oncoming vehicle into your lane, which strikes you and causes injuries to you and a passenger. Unfortunately, the other party flees the scene.
In this scenario, PIP could cover your immediate medical expenses, along with related coverage for lost wages, additional medical care, and so forth. UIM could also kick in an help repair any damage to your car.