Flood And Earthquake Insurance: What You Need To Know

​Floods and earthquakes are natural disasters that can cause significant damage to homes and belongings. Standard homeowners and renters insurance policies typically do not cover losses resulting from these events. To ensure comprehensive protection against flood and earthquake-related damages, separate insurance policies are necessary. In this guide, we will delve deeper into how flood and earthquake insurance work, what they cover, factors that affect premiums, and important exclusions to be aware of.

Flood Insurance: How It Works
Flood insurance is designed to safeguard homeowners and renters against damages caused by floods, high water, and erosion that exceed normal water levels due to storms, tides, or similar events in regions with floodplain regulations. Here's what you need to know:

Factors Affecting Flood Insurance Premiums:
The cost of flood insurance depends on several factors, including:

1. Flood Risk Level: Determined by the National Flood Insurance Program (NFIP), this factor is based on your location's susceptibility to floods.
2. Coverage: The extent of coverage you choose, including your home and belongings.
3. Deductible: The amount you pay upfront for any future claims.
4. Policy Size: The size of your deductible can affect the cost of your policy.

Flood Insurance Coverage:
Flood insurance typically covers the following:

• Home Systems: Including electrical and plumbing systems.
• Personal Belongings: Protecting your valuable possessions.
• Foundation Walls: Coverage for damages to structural components.
• Detached Garages: Up to 10% of the building coverage.
• Valuables: Covered up to $2,500.
• Additional Events: Such as groundwater seepage, mudflow, and damage from sewer backup due to flooding.

Flood Insurance Exclusions:
While flood insurance provides valuable protection, it does not cover certain elements, including:

1. Preventable Damages: Damages that could have been prevented.
2. Living Expenses: Costs associated with temporary accommodations.
3. Business Interruptions: Loss of income for home-based businesses.
4. Property Outside the Insured Building: Such as landscaping.
5. Valuable Items: Art, jewelry, and collectibles are not fully covered.
6. Most Vehicles: Your auto insurance typically covers flood damage.

Earthquake Insurance: Why It's Necessary
Regular homeowners insurance policies typically exclude earthquake damage, necessitating a separate earthquake insurance policy to provide coverage for damages to your dwelling, other structures, personal property, and additional living expenses. Here's what you should consider:

Factors Affecting Earthquake Insurance Premiums:
Several factors influence earthquake insurance costs, including:

• Location: Rates vary by the level of earthquake risk in your area.
• Age and Construction: Older buildings and brick structures may have higher rates.
• Deductibles: Earthquake insurance policies often have deductibles ranging from 5% to 15% of the policy limit.

Earthquake Insurance Exclusions:
Earthquake insurance policies typically have exclusions, such as:

• Water Supply Systems: Damage to water supply infrastructure.
• Underground Structures: Structures beneath the ground.
• Exterior Masonry: Damage to exterior walls.
• Landscaping: Outdoor landscaping features.
• Vehicles: Earthquake damage to most vehicles.
• Business Property: Commercial property is not typically covered.

Earthquake Insurance Coverage:
Earthquake insurance usually covers:

• Dwelling: Your house and attached structures.
• Other Buildings: Such as garages and sheds.
• Personal Belongings: Protecting your possessions.
• Additional Living Expenses: If your home becomes uninhabitable due to earthquake damage.
• Special Limits: Some items may have maximum coverage limits specified in the policy.

Conclusion:
To protect yourself and your property against the devastating effects of natural disasters, it's crucial to consider purchasing separate flood and earthquake insurance policies. Flood insurance covers losses resulting from floods and erosion, while earthquake insurance covers expenses arising from seismic damage. Before buying these policies, carefully review the coverage and exclusions, as costs can vary based on your location, risk factors, and the extent of coverage. Being informed and prepared ensures that you have the necessary financial protection when facing the unexpected.

At Family Auto Insurance Agency, we strive to provide our clients with affordable and comprehensive policies. We will always go all out to satisfy your demands. To learn more about how we can assist you, don't hesitate to contact us at (313) 285-9042 or CLICK HERE ​to request a free quote.

Disclaimer: The information presented in this blog is intended for informational purposes only and should not be considered as professional advice. It is crucial to consult with a qualified insurance agent or professional for personalized advice tailored to your specific circumstances. They can provide expert guidance and help you make informed decisions regarding your insurance needs.​