Insurance Coverage and Losses from Natural Phenomena Text Size:

Some people think their homes are covered for damage caused by all naturally occurring events. You may be surprised when you check your policy. It may cover only damage caused by lightning, windstorms, hail and volcanic eruption. What about earthquakes, mudslides and naturally occurring floods?

Acts of God

Natural phenomena in the insurance industry means any naturally occurring event, including:

• Weather-related events, such as hurricanes, tornados, severe winds, hail, lightning and floods
• Earth movement events that are not man-made, such as earthquakes, tremors, landslides, mudslides, seismic activity, volcanic eruptions and tidal waves

Other terms that are commonly used in place of "natural phenomena" include natural disasters, force majeure or acts of God. Depending on where you live, some occur more often than others, and depending on their severity or intensity, some cause a lot more damage than others. Your insurance policy does not protect your home against all of them.

Named Perils

Most policies provide protection against damage caused by named perils, which are actually listed in a policy. However, even so-called all risk policies will specify the perils that are covered.

The following naturally occurring events are typically covered in all standard homeowner's policies:

• Lightning including fire damage caused by lightning
• Windstorms and hail including tornados, hurricanes and severe thunderstorms
• Volcanic eruptions

In some coastal states, windstorm coverage must be purchased separately, or by endorsement. Other natural phenomena excluded from standard policies include:

• Floods, whether naturally occurring or man-made, and
• Earth movement including earthquakes, mudslides, landslides and sinkholes

Earthquake coverage can be purchased as a separate policy or added to your homeowner's policy by an endorsement. Flood insurance must be purchased as a separate policy and is written by the National Flood Insurance Program.

Surcharges and Renewals

Your insurer is prohibited from imposing a premium surcharge or canceling your homeowner's policy solely due to the number of claims filed from natural-phenomena related damages unless the claim or loss confirms:

• An increase in a hazard or risk of loss
• A material change in the risk assumed, or
• A breach of contractual duties, conditions or warranties that materially affects the nature or insurability of the risk or peril

Questions for Your Lawyer

• How much of your practice is related to insurance?
• How do I determine whether I need flood insurance?
• My insurance company canceled my policy after a recent claim. What can I do?
• How do I find out what coverage is included in my current policy?
• How do I decide which endorsements make sense for me?

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