Becoming Educated in Flood Insurance

I'm going to appeal my insurance company's decision, but I don't think it will do any good. This is part of what I am learning in my middle of the night Google search:

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The Partingtons' have insured their home with State Farm Insurance for about 35 years. They pay $1,300 a year in premiums. They even had an earthquake rider on their policy.

But what the Partingtons' didn't have was mudslide coverage -- something no basic homeowners insurance includes. Now, with their home wiped out by a mudslide, they probably won't be covered for any of the damage.

You may wonder why something like this isn't covered by insurance. But in fact, there are a lot of events insurance doesn't cover. Typical homeowners 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 damage 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.

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"Any damage from water that falls from the sky -- rain, snow, sleet or hail -- that would be covered under a standard homeowners policy. So if the rain broke your roof, or made a hole in the roof or window, all that would be covered," said Pete Moraga, spokesman for Allstate Insurance Co.

But standard homeowners insurance does not cover damage caused by floodwaters or from the movement of earth that results in landslide or a mudslide.

"Your standard homeowners policy will not cover you from any water from the ground," Moraga said.

That applies not only to overflowing rivers and streams but also to overflowing pools, he said.

"Take out three to four inches from the pool right before the rainy season," he advised.

To be protected from flooding, homeowners need to buy a federally backed policy from the National Flood Insurance Program.

The program is administered by the Federal Emergency Management Agency. There are limits on coverage and it is not cheap, which perhaps explains why there are only 255,000 flood insurance policies in California.

A mudslide or landslide is not covered by flood insurance. And if you are looking to get landslide insurance in California, you are out of luck. Lloyd's of London used to offer landslide and mudslide coverage, but it is no longer available. It was very expensive and offered only in areas where there was not a history of landslides and mudslides.

Besides rain and wind, homeowners insurance will cover damage to your house if a tree falls on it and will pay for debris removal. But if the tree falls on your property without damaging an insured structure, the cost of removing the tree will not be covered.