Many homeowners assume their standard insurance policy protects them from all types of damage. Unfortunately, that’s not the case. Standard policies have specific exclusions, and major events like floods and earthquakes are almost always among them. This is one of the key things what homeowners insurance doesn't cover. To be fully protected, you may need to purchase separate, specialized insurance policies.
This guide will walk you through the most common types of separate insurance you might need: flood, earthquake, and umbrella.
Flood Insurance
Standard homeowners insurance explicitly excludes damage from flooding. This includes water from overflowing rivers, heavy rain, storm surges, and even backed-up sewers if the backup is caused by widespread flooding. For protection against these events, you need a separate flood insurance policy.
Most flood insurance is provided through the National Flood Insurance Program (NFIP), which is managed by the Federal Emergency Management Agency (FEMA). Some private insurers also offer flood policies. To understand more about what is and isn't covered, you can read about flood damage coverage.
Who Needs Flood Insurance?
If you live in a designated high-risk flood zone and have a mortgage from a federally regulated or insured lender, you are required to have flood insurance. However, it's a good idea for anyone to consider it. More than 20% of flood claims come from properties outside of high-risk zones.
Not sure what your policy excludes? Upload your declarations page and we'll identify where you might need separate coverage. Upload your declarations page for a free analysis.
Earthquake Insurance
Similar to flood damage, damage from earthquakes is not covered by standard homeowners insurance. This includes structural damage to your home, as well as damage to your personal belongings. To cover this, you'll need to add an earthquake endorsement to your existing policy or purchase a separate earthquake insurance policy.
Who Needs Earthquake Insurance?
If you live in an area with a high risk of earthquakes, such as California, Alaska, or the New Madrid Seismic Zone in the central U.S., you should strongly consider earthquake insurance. Even if you don't live in a high-risk area, earthquakes can still happen. It's important to weigh the potential cost of damage against the cost of the policy.
Umbrella Insurance
Umbrella insurance is a type of personal liability insurance that provides an extra layer of protection beyond the limits of your existing policies. If you're found liable for damages that exceed the limits of your homeowners or auto insurance, your umbrella policy will kick in to cover the remaining costs.
Who Needs Umbrella Insurance?
Anyone who has significant assets to protect should consider an umbrella policy. This is especially true if you have a swimming pool, a trampoline, or a dog, as these can all increase your liability risk. If you're not sure if you have enough coverage, it might be one of the signs you're underinsured.
How to Determine Your Needs
To figure out if you need any of these separate insurance policies, you should:
- Assess your risk: Do you live in an area prone to floods or earthquakes? Do you have significant assets to protect?
- Review your current policies: Understand what is and isn't covered by your existing homeowners and auto insurance.
- Talk to your insurance agent: An agent can help you assess your risk and determine the right amount of coverage for your needs.
By taking the time to understand your risks and your coverage options, you can ensure that you have the protection you need to weather any storm.