Enquirer Herald

Typical insurance policies don't cover floods, earthquakes

If your house is flattened by an earthquake, or your home flooded by hurricane-induced rains, don't look to your homeowner's insurance for help.

Catastrophic events are usually not covered by standard insurance policies. Additional, specific coverage is needed to protect a home and its contents, insurance experts say.

While York County was spared hurricane-force winds and rain from Hurricane Irene, and damage from the Tuesday's earthquake in Virginia was minimal, the events are a wake-up call, said Ann Roberson, spokeswoman for the state's Department of Insurance.

"You just don't know what will happen," she said. "You need to be prepared on the front end."

Roberson said most insurance companies won't put a policy into effect until 30 days after it is written - meaning those trying to find insurance to protect their assets from Hurricane Irene were out of luck. Insurance companies also will suspend writing policies when severe weather is threatening, she said.

It's not just on the front of the severe weather or natural disaster where the damage occurs, she said. Hurricanes lose strength when they make landfall and turn into tropical storms. According to the Federal Emergency Management Agency, a slow-moving tropical storm can yield as much rain as the most severe hurricane. The floods are often hundreds of miles inland from the hurricane's landfall.

"Everyone lives in a flood zone," she said. "It just depends how severe the flooding might be."

Flood insurance is offered by the federal National Flood Insurance Program. People who live in designated flood plains are usually required to get this insurance to satisfy lenders. But people who live in areas less prone to floods also can get the insurance.

The cost can be as low as $129 per year for your home and its contents. The value of the policy and the risk of flooding determine the annual premium. Homes with basements typically pay higher premiums.

The maximum amount you can insure is $250,000 for a home and $100,000 for its contents. Renters also can get flood insurance for their contents. Commercial buildings can be insured for up to $500,000 for the building and $500,000 for the contents.

The average flood damage claim is about $48,000, according to FEMA.

In areas where a federal disaster is proclaimed, homeowners can get aid - a loan that must be paid back with interest.

For a $50,000 loan at 4 percent interest, the monthly payment is about $240 a month or $2,880 a year for 30 years. The yearly premium on $100,000 of flood insurance is about $33 a month or $400 a year.

Earthquake insurance for most of South Carolina is "not on people's radar screens, but they probably should ask about," said Robert Sanders Jr., executive vice president of Preferred Specialty LLC. The Columbia-based company sells earthquake insurance.

Sanders said most of the state's earthquake polices are sold in Charleston, Dorchester and Berkeley counties - along the Middleton-Place-Summerville fault line.

"Very rarely do we sell a policy in Rock Hill," he said.

Annual rates for earthquake insurance are between 10 cents and 12 cents per $100 of assessed value, Sanders said.

Rates and availability will likely change, Sanders said. Tuesday's earthquake in Virginia, plus the one that shook Japan, will drive earthquake insurance premiums up and the amount of available insurance down, he said.

The chance of a quake severe enough to cause major damage centered in York County is about 1.5 percent, according to the U.S. Geological Survey.

But, as shown by the recent Virginia quake, you don't have to be at the quake's source to suffer damage, experts said. "All of South Carolina is at risk from an earthquake that could cause damage," said Erin Beutel, director of the South Carolina Earthquake Preparedness Center in Charleston.

Russ Dubisky of the South Carolina Insurance News Service said residents should look at their automotive insurance when it comes to severe weather and natural disasters. When a tree falls on a car, it is a policy's comprehensive, not collision, provisions that are applied to the loss.

Typically, people with newer vehicles, or ones in excellent condition, carry comprehensive coverage so they can replace or repair the vehicle in case of loss. People with older cars, or those in poor condition, typically reduce or drop comprehensive coverage.

For information on flood insurance, go to: www.floodsmart.gov/floodsmart/

For information on earthquakes in South Carolina, go to: www.scemd.org