In the state of California, there are two important coverages a standard homeowner policy does not include: flood and land movement. Since homeowner policies vary state to state, you will want to consult your local insurance agent to see what peril your policy may not cover.
Flood insurance
The National Flood Insurance Program provides flood insurance directly to policyholders in two ways. You can either choose to purchase it through an agent who supplies Write Your Own (WYO) policies, or you can go through the NFIP directly. This type of insurance is not supplied under your homeowner policy and must be purchased separately.
Depending on where you live, it can either be affordable or very pricey. It is federal law that if you have a mortgage it is mandatory that you maintain flood insurance on your property if you live in or near a flood zone. If flood insurance is not something you can afford, then keep it in mind when choosing your next house. If it is in a flood zone, then be prepared for high rates. For more information regarding flood insurance, please visit the government Floodsmart web page or see your local insurance agent.
Land movement
One type of land movement that your homeowner policy does not cover in the state of California is earthquakes. This is a separate companion policy to your homeowner policy that can be purchased through your agent on behalf of the California Earthquake Authority or GeoVera. The CEA covers California only, and GeoVera covers California, Oregon and Washington. In most cases, carrying earthquake insurance is voluntary, but some mortgage companies make it mandatory.
This insurance will help cover the expense of rebuilding your home if it is damaged by an earthquake. There are options on this type of policy for personal property that is also damaged by earthquake. There are many people who do not know this coverage exists and think it is a part of their homeowner policy. Sadly, when disaster strikes, the last thing anyone would want to hear is that their home was not covered and the repair bill is all out of pocket.
Knowledge is the key to understanding your insurance, and what it does and does not cover. If you have any questions or concerns, it is recommended that you speak with your local insurance agent every year after receiving your declarations page and bill. The declarations pages will state the amounts of your coverage, but not all of the specifics. The packet that originally came with your policy contains the information you need for what is covered and what is not. If you do not know, then ask. Don’t wait to find out when your backyard pool overflows and runs under your door damaging your carpet, or that the last small earthquake damaged your home’s foundation and you are not covered.