If you live in certain areas prone to natural disasters, or particular states, you may need to get extra coverage beyond your homeowners policy. But, be prepared: it gets complicated!
Earth Movement Coverage Exclusions
Home policies don’t necessarily cover a natural disaster, the most common of which is earth movement. Under certain circumstances even extra coverage excludes coverage for this kind of issue, which includes sinking, shifting, rising, expanding and contracting of the earth beneath your home.
This all means that your typical policy won’t cover damage to your home due to a mudslide, mudflow, earthquake, landslide, sinkhole, erosion. It also includes a faulty home site and other external forces, such as nearby construction that causes earth movement damage to your home. If your home sustains damage from a volcanic eruption or lava flow, you’re out of luck, too.
An exception is that if an earth movement event causes a fire that affects your home, you’re covered. If flooding causes damaging earth movement, however, many supplemental floor policies exclude coverage.
Some states prone to particular kinds of earth movement require insurance providers to offer coverage, such as earthquake insurance in California. Sometimes a state agency may be set up to offer coverage.
Difference in Conditions Policies (DIC)
DIC policies cover earth movement damage that regular policies won’t. In some cases, it’s hard to get coverage at all for earth movement. If you can get a catastrophic insurance policy you’ll probably pay a lot for it. However, these policies don’t always provide comprehensive coverage and can come with high deductibles. DIC coverage is based on a percentage of the cost of replacing your home, usually 5 to 20 percent. Your out of pocket will be high.
Where to Buy a DIC Policy
- Surplus line insurance agents and brokers offer DIC coverage. Get in touch with your state insurance commissioner’s office to find one.
- Check with your homeowner insurance provider about how to purchase a DIC policy.
Home Insurance Coverage Riders
You can also purchase a rider in addition to your regular policy to cover contents of your home for perils, including earth movement. Not all insurance companies sell riders for content coverage, however. If your homeowners insurance provider doesn’t offer it, you’ll need to find a company that will offer you a policy along with the rider.