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4 Major Disasters Homeowners and Renters Insurance Won't Cover

Money Girl explains 4 major disasters that are surprisingly not covered by home or renters insurance.

By
Laura Adams, MBA
6-minute read
Episode #369

4 Major Disasters Homeowners and Renters Insurance Won’t Cover

Now that you know what home and renters insurance generally covers, here are 4 major disasters that they won’t cover:

Disaster #1: Earthquakes

Basic home and renters policies don’t cover earthquake damage to your property or personal belongings. As you can imagine, intense shaking can destroy entire buildings and valuable contents.

Note that if fire erupts or broken pipes cause water damage following an earthquake, those damages would be covered by a typical home policy in most states.

While a flood may seem very different from an earthquake, they do have something in common: neither one is covered on a standard home or renters insurance policy.

A majority of the world’s strongest earthquakes take place on the Pacific Coast, from Southern California to Alaska. But the U.S. Geological Survey says that more than 20 states have experienced measurable earthquake activity in the past 30 years. I’ve lived in South Carolina and Florida, and felt earthquakes in both of those states.

You can see a map of the top earthquake states at the U.S. Geologic Survey website, earthquake.usgs.gov.

In most states, home insurers offer earthquake insurance as a supplement, and premiums vary widely depending on the risk factors where you live. Contact your insurance agent or company to get an earthquake quote. If you live in California, check out the California Earthquake Authority (CEA) premium calculator to see rates for your area.

Disaster #2: Floods

While a flood may seem very different from an earthquake, they do have something in common: neither one is covered by a standard home or renters insurance policy.

Don’t think that just because you don’t live on a river or ocean,you’ll never experience a flood. According to the federal government’s National Flood Insurance Program, nearly 20% of flood claims come from low- to moderate-risk areas.

Flood insurance is issued by the federal government and a few private insurers, but is sold through independent agents or insurance representatives. If you have a mortgage, flood insurance may be required by your lender if you live in a high-risk flood area.

Just like with earthquake coverage, premiums for flood insurance vary depending on where you live, but may be as low as $129 per year. Visit floodsmart.gov to learn more.

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About the Author

Laura Adams, MBA

Laura Adams received an MBA from the University of Florida. She's an award-winning personal finance author, speaker, and consumer advocate who is a frequent, trusted source for the national media. Money-Smart Solopreneur: A Personal Finance System for Freelancers, Entrepreneurs, and Side-Hustlers is her newest title. Laura's previous book, Debt-Free Blueprint: How to Get Out of Debt and Build a Financial Life You Love, was an Amazon #1 New Release. Do you have a money question? Call the Money Girl listener line at 302-364-0308. Your question could be featured on the show.