Common Home Insurance Add-Ons
- Flood insurance and earthquake insurance are not included in a standard homeowners insurance policy and must be purchased separately.
- Flood insurance is only available in areas who are participating in the National Flood Insurance Program.
- Earthquake insurance is available in all 50 states to cover any damages from an earthquake.
Flood Insurance and Earthquake Insurance
In most homeowners insurance policy, your home is covered against fire, theft, and damages. If you live in a flood or earthquake prone area, you may need to purchase additional coverage.
Flood insurance is not available everywhere. To be able to purchase flood insurance, your community must be participating in the National Flood Insurance Program (NFIP). The program is administered by the Federal Emergency Management Agency (FEMA) and you can get flood insurance through insurance agents and brokers who deal with FEMA.
The typical flood insurance policy will cover damages to your property and possessions. A flood is defined by the NFIP as "a general and temporary condition of partial or complete inundation of two or more acres of normally dry land area or of two or more properties (at least one of which is your property) from:
- Overflow of inland or tidal waters
- Unusual and rapid accumulation or runoff of surface waters from any source
- Collapse or subsidence of land along the shore of a lake or similar body of water as a result of erosion or undermining caused by waves or currents of water exceeding anticipated cyclical levels that result in a flood as defined above."
Flood insurance will cover damages to the building structure and foundation, electrical and plumbing systems, kitchen appliances, carpets, window blinds, central air conditioning, furnaces, and water heater. It does NOT cover damages caused by moisture, mildew, or mold that could have been prevented by the home owner or and belongings outside of the building such as trees, swimming pool, patios, fences. Additionally, flood insurance does NOT cover any expenses incurred for temporary housing.
Earthquake insurance is available in all 50 states and cost varies depending on the area you live and other factors such as your home condition. In general, earthquake insurance will cost more in areas that have a higher likelihood of an earthquake. You can obtain earthquake insurance from most insurance providers and California residents can obtain coverage through the California Earthquake Authority (CEA), a publicly managed organization that partners with insurance providers to provide earthquake insurance.
Like flood insurance, an earthquake insurance policy will cover damages to your home and your personal property. In a CEA policy, you can choose to cover up to $5,000 or $10,000 in personal property. For coverage on your home, you can choose a deductible of either a 10% or 15% of the insured home's value for a CEA policy. The high deductible means that you will be protected if your home is severely damaged, but you may pay out of pocket for any minor damages that do not exceed the deductible.
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