Hurricanes, Floods, Fires and Tornadoes: Natural Disaster Insurance Policies to Weather Any Storm

Weather events in 2023 cost the US $92.9 billion, including wildfires, droughts and floods, according to the National Oceanic and Atmospheric Administration, or NOAA. These events will only become more common and more severe, according to the US Global Change Research Program's National Climate Assessment. 

For homeowners, traditional insurance policies provide limited coverage for natural disasters, often excluding damage due to events like floods and earthquakes. 

Depending on where you live, investing in supplemental policies could help, so it's important to understand your insurance needs before a natural disaster hits. Policies specifically for floods, windstorms and more can help cover costly repairs -- and prevent significant financial loss -- in the future.

Read more: Watch Out: These Post-Hurricane Scammers Can Steal Your Money or Identity

What about renter's insurance?

A renter's insurance policy may cover certain natural disasters, including damage caused by heavy rain, tornadoes, hail and earthquakes, though you'll likely need to opt into coverage for the latter. Damage caused by floods isn't covered by most renter's insurance policies.

Do you have the right insurance policy for your house?

For most people, their home is their largest asset, and if something happens to your home and you're not covered by an insurance policy, you could lose everything. 

If you have a mortgage on your house, your lender will require you to carry a basic home insurance policy. Even if your home is fully paid off, opting to drop your homeowners insurance policy is incredibly risky. 

You can check to see which types of damages your insurance policy covers by reviewing your policy's declarations page. There you can find what is covered and for how much. It should also list exclusions.

By checking your exclusions, you can learn which types of supplemental coverage you may need, such as flood or earthquake coverage.

How natural disaster insurance works

Any kind of disaster-related insurance is separate from homeowner's insurance. It goes beyond what's typically covered by your homeowner's policy. There are different policies for different types of events, including floods, extreme wind damage and earthquakes.

Some insurance policies, like for flood coverage, include a waiting period before the policy will cover damage to your home, so you'll need to buy it before a disaster strikes. 

In general, if a natural disaster strikes your home and you have insurance, you'll file a claim for the damages. You may need to file multiple claims, depending on the damage type. 

For example, a hurricane could cause your home to flood, but the wind could also damage your roof. So you'd likely need to file two claims: one with your flood insurance provider and one with your homeowners insurance provider (and maybe for windstorm insurance). Each damage type will require a claim with its respective insurance provider. 

Most claims can be managed online, if you have internet access, but you can also call an agent or a claims representative if you have questions. If the disaster is widespread in your area, expect long wait times.

Depending on where you live, which natural disasters your area is most at risk for and what your policy covers, you may want to consider getting supplemental insurance.

Wildfires

Most homeowners insurance policies cover destruction and damage caused by fire, which includes wildfires. So you don't need a separate policy to protect your home against wildfires. But you should regularly check in on your policy, particularly if you live in California or another area prone to wildfires. 

Since 2022, Allstate has stopped writing new homeowners insurance policies in California, followed by State Farm and others. California has taken measures to implement moratoriums on insurance carriers canceling policies after a wildfire if the governor declares a state of emergency. 

If you're in California, you aren't without options. If you're unable to find coverage through other providers, you may be able to get basic fire insurance coverage through the FAIR plan. 

Floods 

Flood damage isn't covered by a standard homeowner's policy. For flood protection, you need to get a separate flood insurance policy through the National Flood Insurance Program -- a federal government-sponsored flood insurance program -- or a private insurer. 

If you get a mortgage for a home that's located in one of FEMA's designated high-risk flood zones, you are required to carry flood insurance. Although you don't have to carry flood insurance if you live outside these zones, it's still recommended for all homeowners and renters. 

But only about 15% of homeowners buy flood insurance, according to Michael Ashley Schulman, partner and chief investment advisor at Running Point Capital Advisors.

If you get flood insurance through the NFIP, a basic policy covers $250,000 for the home itself and $100,000 for personal property. There is a 30-day waiting period for new policies before you can file a claim, which means you need to buy a policy well before you need it. Flood insurance typically covers damages to the following: 

• Appliances
• Cabinetry
• Carpeting
• Electric systems within the home
• Foundation
• Plumbing systems within the home
• Staircases
• Window treatments
• Personal valuables

The following aren't usually covered by flood insurance:

• Loss of use
• Additional living expenses
• Financial losses caused by business interruptions
• Moisture, mold or mildew that could have been avoided or is not directly related to the flood
• Earth movement such as mudslides even if they are caused by a flood
• Property that is outside of the insured building, which includes decks, septic systems and fences

Flood damage costs between $180 billion to $496 billion every year in the US, according to the Senate Joint Economic Committee. And more than 25% of flood claims come from homeowners outside of high-risk areas.

"Flooding causes more damage than any other natural disaster, and no state or region of the country is safe from flooding," said Tyler Ardron, vice president and managing partner of Risk Reduction Plus Group. 

Ardron said flooding can be caused by prolonged rain, but also snowmelt and dam failures.

Tornadoes

Wind and hail coverage is often part of a standard homeowners policy, which would cover tornadoes. However, in states typically at risk for strong windstorms and hail -- including Florida, Iowa, Kansas, Nebraska, Ohio, Oklahoma, South Dakota and Texas -- you may want to purchase additional coverage, which can help cover the costs of extreme wind or hail damage.

Remember that windstorm coverage doesn't cover storm surges or flooding, so you might also need flood insurance.

There is typically approximately a 16-day waiting period for windstorm coverage to take effect.

Hurricanes

There is no hurricane-specific homeowners insurance supplement, so homeowners in hurricane-prone areas will likely want to opt for flood insurance and perhaps a  windstorm policy as well.

Although damage from hurricanes has become more widespread and far-reaching in recent years, the states most commonly hit by hurricanes are:

• Alabama
• Florida
• Georgia
• Louisiana
• North Carolina
• South Carolina
• Texas

Earthquakes

Earthquakes are not covered by a standard homeowners insurance policy. Homeowners who want to protect their homes from earthquakes will need to purchase separate policies. 

California, Alaska and Hawaii are the states typically at the highest risk of earthquakes, but in January 2024, the United States Geological Survey released the latest Seismic Hazard Model, which estimates that nearly 75% of the country could experience a damaging earthquake.

Earthquake insurance can be purchased as a separate policy and often covers any damage that is the direct result of an earthquake. It doesn't cover indirect damage, such as fire or water damage.

There is typically a three-day waiting period before you can file a claim with earthquake insurance policies to account for aftershocks. Otherwise, you may need to file more than one claim.

Other natural disasters 

There are other natural disasters that could damage a home, including volcanoes, tsunamis, mudholes and sinkholes. Volcano coverage is included in most homeowners insurance policies, but sinkholes and tsunamis are a different story.

You may need flood insurance to cover tsunami and mudflow damage. 

Sinkhole protection requires a separate sinkhole endorsement. Claims for sinkhole coverage must be filed within two years of the event, and you typically have to own the policy for 30 days before coverage goes into effect.

How to file an insurance claim after a natural disaster

It's important to file a claim as soon as you can after the natural disaster passes. Try to file your claim the day the damage occurs, if possible.

Like with a standard homeowners insurance policy, it's a good idea to take photos or a video of your home while everything is intact, which can help document not just the state of your house prior to the disaster, but also the personal property that's covered by the policy. You'll also want to take as many photos and videos as possible on the day the damage occurs or as soon as it's safe for you to return to your home. 

Pro tip: Every homeowner should create a home inventory list and update it regularly, regardless of where you live. Include the purchase date, model and serial number, if applicable. Use photos and video to document an item's current condition. Store documentation securely in the cloud in case your storage device is destroyed.

If your home is damaged, try to refrain from throwing anything away until an insurance adjuster can visit. It usually takes between 24 and 48 hours after you file a claim before an adjuster can come to see the damage in person. If the event was widespread and a number of homes were affected, it could take longer.

However, you don't want to endanger yourself or further damage the house (allowing mold to grow, for instance). If you need to remove damaged items, like wet carpet, before an adjuster can visit, get as many photos and video as you can documenting the damage. If possible, store damaged materials in garbage bags that the adjuster can later open to inspect.

If you hire a remediation company to repair damage, make sure they document the damage and share the information with you.

Warning: Scam contractors are quick to take advantage after a disaster. If someone shows up on your doorstep promising to fix your house quickly or for an unusually low price, be suspicious. Work with certified contractors who don't rush you into signing a contract and who understand what your insurance policy will cover.

How should homeowners handle or minimize a high deductible?

If you can, avoid a low-deductible plan. They could encourage you to submit smaller losses and cost you more in the long run, according to Clare Schachter with Woodruff Sawyer. 

If a client buys lower deductibles and doesn't submit small claims, they're paying more for nothing. So, it's best to avoid low deductibles," Schachter said.

If you chose a higher deductible in exchange for a lower monthly payment, know that many companies offer a deductible waiver. Should your claim surpass a certain dollar amount, you won't be required to put any of your cash toward repairs.