The Howes Insurance Agency

If a storm hits, are you covered?

There are a lot of events that a typical home insurance policy don't cover
By Gerri Willis, CNN

August 24 2007: 3:57 PM EDT

NEW YORK (CNNMoney.com) -- The floods and rain in the Midwest continue to cause severe problems there. We spoke with one family whose home was destroyed by a mudslide.
The Partingtons' have had State Farm Insurance for about 35 years. They pay $1,300 a year in premiums. They even had an earthquake rider on their policy. What the Partingtons' didn't have was any mudslide coverage - something no basic homeowners insurance has. Now, with their home wiped out, they probably won't be covered for any of the damage.

Just because you have homeowner's insurance doesn't mean you are fully covered during a storm.

You may wonder why something like this isn't covered by insurance. But in fact, there are a lot of events that insurance doesn't cover. Typical homeowner policies do not cover floods, earthquakes, mudslides, sinkholes, war or nuclear accidents.
In the case of mudslides, you may be covered if you have flood insurance. A policy may cover mudslide damages as long as the mud is carried by a river or stream of water. So if a dam breaks and picks up a hillside and carries it into your home, you may be covered.
But a flood policy will not cover damage if a hillside becomes saturated as a result of rainfall and slowly begins to move. That's considered earth movement.

Like earthquake insurance, the only people who buy this kind of insurance are those who are at a high risk of it happening. Unless the risk is spread out, insurance companies don't want to touch this.

There are some products that cover landslides. But they are very expensive. On a $500,000 house, the deductible for a landslide is $1,000. The premium is $2,500 a year, according to Independent Insurance Agent Jerry Miller.

You might also be able to get mudslide insurance from a higher-end company, but again it will be very pricey.

If you live near (or on) a severe hillside, or if you live in a hilly area that has heavy rainfall or an area that has experienced a mudslide in the past, you might consider these expensive options.

Get flood insurance if you're worried about flood risk. The National Flood insurance program has preferred pricing for people who don't fall within a flood zone. It may only be a couple hundred bucks a year.

You may also want to talk to a soil engineer. They would be able to examine the ground and determine how stable it is. If you're really worried about a mudslide, it might be time to move.