According to the Federal Emergency Management Agency, Texas has had seven natural disasters since 2014. Standard homeowners insurance policies cover several types of disasters but not all collateral damage typically associated with such events. The barebones HO-1 insurance policy covers disasters like fires, lightning, windstorm damage, tornados, hail, explosions, smoke and volcanic eruptions. However, not all natural disasters are covered. Standard homeowners insurance policies do not cover earthquakes.
Coverage excluded from homeowners insurance
Earthquake coverage is typically offered as a separate policy or endorsement. Flood damage is also excluded from standard homeowners insurance policies. Homeowners can obtain flood coverage through a separate policy offered by the National Flood Insurance Program (NFIP) and select private insurers. Homeowners’ insurance policies do not cover damage caused by a lack of maintenance. Sewage backup is also excluded from standard homeowners insurance policies. Coverage for sewage backup must be obtained with a separate policy or as an endorsement.
More on homeowners insurance coverage
Standard homeowners insurance covers damage caused by aircrafts, vehicles, riots or theft. Those with broad HO-2 policies are also covered against damages caused by the weight of snow, sleet or ice. To be covered against all perils, excluding landslides, floods, wars, earthquakes and nuclear accidents, an HO-3 policy is required. Each year, residents in Texas spend over $500 million on disaster coverage. Disaster coverage applies to damage caused by earthquakes, floods and disasters not covered by standard policies.
In Texas, the average cost of flood insurance typically ranges from $150 to $200 per month. The average cost of earthquake insurance in Texas is usually around $15 to $20 per month. The prices for disaster insurance typically vary according to the risk of exposure and the location of the property. While natural disasters cannot be avoided, appropriate coverage can help mitigate the resulting damages and financial exposure.