Natural Disaster Insurance: What Does It Cover?
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Natural disaster insurance is part of your regular home insurance, except coverage for flooding and earthquakes.
Most homeowners insurance policies protect your property from wind, rainstorms, accumulating snow and fire. They also cover extreme events like blizzards, tornadoes, wildfires, volcanic eruptions and falling meteorites.
A standard homeowners insurance policy won't cover all natural disasters, though. You'll need add-on coverage or separate policies to protect against floods and earthquakes.
Does homeowners insurance cover tornado damage?
Your homeowners insurance policy should cover tornado damage as part of its standard coverage. This usually includes any hail, wind and water damage the storm causes, as long as the water damage isn't caused by flooding.
Insurance companies may charge a separate deductible in states where tornadoes are more common. You'll have to pay that deductible for any tornado damage claims you file.
The rate you'll pay depends on your insurance company. But many charge either a flat-rate deductible or a percentage of your total property value.
How do percentage-based deductibles work? Let's say your homeowners insurance has $250,000 of dwelling coverage and a 1% deductible for wind damage. If your home suffered tornado damage and you wanted to make a claim, you would have to pay a $2,500 deductible.
You may need more coverage in storm-prone areas
If you live in an area prone to storms, you should make sure you have enough tornado insurance to rebuild after a complete loss. Speak with your insurance agent to learn more about how much insurance you have and how to raise your limits if needed.
Some insurance only covers the actual cash value (ACV) of your home. A home insurance policy with ACV coverage may not let you rebuild your home exactly as it was before the tornado.
Consider upgrading to replacement cost coverage. This type of insurance gives you the full amount needed to replace damaged items and rebuild your home.
States with the most property damage from strong tornadoes (2009-2019)
State | Property damage |
|---|---|
| Alabama | $4.2 billion |
| Missouri | $3.3 billion |
| Texas | $2.0 billion |
| Oklahoma | $2.0 billion |
| Illinois | $1.2 billion |
| Ohio | $685 million |
| Mississippi | $591 million |
| Kansas | $561 million |
| Georgia | $508 million |
| Arkansas | $403 million |
Source: NOAA's Storm Events Database
Does homeowners insurance cover hurricane damage?
Your homeowners insurance should cover at least some of the damage caused by hurricanes. Standard policies cover wind damage and damage from rainwater.
Say flying debris breaks a window in your living room and rainwater soaks your carpet, leading to water damage in your walls and on your floor. If you file a claim with your home insurance company, it will typically help you pay for repairs. This is because the water damage resulted from rain, not a flood.
Insurance companies usually won't cover flood damage caused by the hurricane. So if your home has water damage caused by storm surge, your policy won't pay for the cost of repairs.
This is why you should get flood insurance if you live in a hurricane-prone area. Flood insurance covers you for floods from hurricanes, broken levees and other severe weather events.
What other disasters does a standard home insurance policy cover?
Most standard homeowners insurance policies also cover damage caused by blizzards, lightning, windstorms, wildfires and volcanic eruptions.
- Wildfires: Most policies cover your home, belongings, outbuildings and sheds from damage caused by wildfires. Some policies offer added coverage such as "living expenses reimbursement" if you can’t live in your home while damage is being repaired.
- Windstorms: Damage caused by windstorms like squalls, derechos and downbursts is also covered by standard home insurance policies.
- Volcanic eruptions: If you live in an area near an active volcano, your home insurance policy should cover damage caused by any eruptions. Most policies cover damage caused by ash flows, lava, the eruption itself and volcanic dust. Earthquakes and mudslides caused by the eruption usually aren't covered, though.
- Lightning strikes: Your homeowners insurance policy should also cover damage caused by lightning strikes on your property.
- Blizzards and heavy snow or ice: If your property is damaged by heavy snow or ice storms, your home insurance should cover the repairs up to your policy's limits.
What disasters aren't covered by homeowners insurance?
Your home insurance policy probably doesn't cover damage caused by floods and earth movements, such as earthquakes and landslides. If you live in a hail-prone area, you may also have limited coverage for damage caused by hailstorms. Read through your policy or talk with your agent to find out what is and isn't covered.
Flood damage
Home insurance companies typically don't cover flood damage and mudflows, so you'll have to buy a flood insurance policy through the National Flood Insurance Program (NFIP) for that protection. The NFIP, a federal program that collects research on flood damage in the U.S., works through private insurers to provide federally sponsored flood insurance. You can also choose to buy private flood insurance through your preferred insurance company.
There's usually a 30-day waiting period for flood insurance. If you live in an area that's prone to flooding, you should consider buying a policy before the height of the flood season to avoid being uninsured against this kind of damage.
Earthquake and sinkhole damage
Most home insurance policies don't cover damage caused by earthquakes and other earth movements like mudslides, landslides and sinkholes. If you live in an area where earthquakes, landslides or sinkholes are common, you should consider buying separate earthquake or sinkhole insurance.
Mudslide and landslide insurance isn't something everyone needs. But if you live in a state where landslides are common, like California or Washington, buying a policy could help you protect your home. Unfortunately, these policies can be expensive, so be sure to shop around.
Hail damage
Your home insurance policy usually protects you against hail damage. But if you live in an area with frequent hailstorms, like Nebraska, Texas or Colorado, your insurance company might make you pay higher deductibles for hail damage. In some cases, it may only cover structural damage caused by hail. If a hailstorm causes cosmetic damage, like damaging your landscaping or denting your gutters, you'll likely have to pay for repairs yourself.
Damage to cars
Your homeowners insurance won't cover repairs to your car if it's damaged on your property during a natural disaster. If your car needs repairs, you'll have to file a claim with your car insurance company.
Imagine your car is parked in your garage. The garage then burns down during a wildfire or a tornado blows it apart. Even if the natural disaster damaged your car while it was inside the garage, you wouldn't be able to file a homeowners insurance claim to repair or replace the car. Instead, you would have to file a claim through your car insurance.
How do insurance companies pay for natural disasters?
The money you receive after a natural disaster damages or destroys your property depends on the type of home insurance coverage you have. There are four types of coverage you should know about: actual cash value, replacement cost value, extended and guaranteed value.
Coverage type | What it does |
|---|---|
| Actual cash value | Pays the value of your items minus any decrease in value. |
| Replacement cost value | Pays the full cost of replacement or repairs with new items of similar quality. |
| Extended coverage value | Pays additional costs over your policy's limit. |
| Guaranteed value | Pays an amount you set with your insurer for damaged or destroyed items. |
If you have an actual cash value policy, your insurance company will calculate any decrease in value for your home when you file the claim.
Say you're filing a claim for a damaged washing machine that you paid $1,000 for when you bought it 10 years ago. Since it's several years old, the actual value of that washing machine is $600 because it has depreciated or lost $400 in value. With actual cash value insurance, your insurance company pays you the $600 because that's what the damaged washing machine is worth when you file your claim.
If you have a policy with replacement value coverage, your insurance company won't account for that drop in value, but it will only pay up to your insurance policy's limit.
To increase the chances of your insurance company paying you for the full value of your home, you'll want to buy extended or guaranteed replacement value coverage. If surprise costs show up and go over your policy's limit, you'll still get the money you need to make repairs.
How to check your natural disaster insurance coverage
The best way to find out what you're covered for is to talk to your insurance agent. They'll walk you through your policy and tell you about the types of natural disasters it covers. If you're familiar with insurance, log into your account online and review your policy's terms, looking at the types of natural disasters it covers.
If you're not comfortable with industry jargon, call your insurance agent or your insurance company's customer service line. They'll be able to pull up your policy and explain the types of disasters it covers.
If anything is missing or you have questions, let them know. You may need to buy a supplemental insurance policy to round out your coverage. Remember, earthquakes, landslides and flooding usually aren't covered by standard home insurance policies. You'll need dedicated flood, earthquake and earth movement insurance for that protection.
Frequently asked questions
Why doesn't homeowners insurance cover all natural disasters?
Homeowners insurance doesn't cover all natural disasters largely because insurance companies can't afford to pay for every property damaged by floods, earthquakes and other similar disasters. You can buy supplemental insurance for those disasters to round out your insurance coverage.
Do I need to buy flood insurance?
If you live in a flood-prone area, buying flood insurance is a good idea. Without it, you'll have to pay for any repairs or replacements on your own after a flood. This can add up to thousands of dollars.
Are there deductibles for natural disaster insurance?
Some insurance companies have disaster-specific deductibles you'll need to pay if you file a claim for that type of damage. For example, if you live in a hail-prone area, you may have to pay a separate hail damage deductible when you file your claim. If you're just filing a claim for lightning or tornado damage, you'll likely only have to pay your normal home insurance deductible.
Sourcing
Information about tornado-caused property damage came from NOAA's Storm Events Database. Flood insurance information came from the National Flood Insurance Program. Earthquake insurance information was sourced from the California Department of Insurance.
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