What Homeowners Need to Know About Landslide Insurance Coverage

When taking out a mortgage, lenders typically require homebuyers to select an insurance policy that secures the loan. Although property owners think about homeowners insurance coverage as protecting their living space, banks want to ensure that replacement and repair funds are available in the event of a total loss. But rare disasters such as a landslide may not necessarily be covered under a standard homeowners insurance policy. In the event a landslide damages or destroys your home or agricultural building, it’s not unusual for property owners to suffer significant losses.

What Natural Disasters Does Homeowners Insurance Cover? 

It may come as something of a surprise, but not every natural disaster is covered through a standard policy. Property owners are generally insured for damage or devastation due to wildfires, theft, vandalism, tree falls, and severe weather storms. Sometimes getting paid for water damage due to floods or high-wind storms require an additional rider. 

Landslides may occur naturally due to severe rain, earthquakes unsettling swaths of land, or as a result of clearcutting. When forests are harvested for lumber, companies remove roots systems in order to replant them in an environmentally responsible fashion. But removing roots that kept the soil in place can result in a landslide, usually in conjunction with heavy rainfall. After thoroughly reviewing a policy, building owners are surprised the following are typically not included in their coverage. 

  • Earthquakes 
  • Landslides 
  • Floods 
  • Sewer Backups 

It seems counterintuitive that residential and commercial property owners paid for insurance that will not approve a claim following these types of losses. But that’s precisely what could happen unless changes are made to ensure replacement and repairs are fully covered. 

How to Ensure Landslide Replacement Claims are Covered 

There are two relatively straightforward ways to ensure you’re covered in the event a landslide damages or destroys your home.  

  1. You may be able to purchase a rider that expands coverage to seemingly rare disasters such as a landslide. This approach explicitly identifies the type of loss in your policy.  
  2. The second involves upgrading your homeowners policy to what is called comprehensive coverage. This type of homeowners policy holds an insurance company responsible for paying claims on every conceivable kind of loss, including a landslide. 

Secure an Accurate Replacement Cost Estimate in Your Policy 

If you have what is known as “replacement cost coverage,” the insurance carrier pays for repairs or replacement that effectively restores the structure to its pre-damage state. But if the homeowners policy provides “actual cash value coverage,” depreciation is typically subtracted from the loss. That often results in the property owner paying a portion out-of-pocket. In the event a landslide destroys your house, it’s essential to understand the cost differences between these coverages. That begins by determining how much it would cost to rebuild after a catastrophe. 

The Douglas Residential Cost Guide is an accurate, user-friendly online resource adopted by insurance professionals and homeowners alike. Before you make changes to an existing insurance policy, use the guide to secure an accurate estimate.