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Maryland homeowners and insurance coverage for natural disasters

In Maryland and other states, homeowners may be surprised to find that the terms of their home insurance policies are not what they seem. In the interest of reducing the cost of paid claims, most insurance companies offer varying coverage for natural disasters known as 'acts of God." In many cases, homeowners living near high-risk areas for a natural disaster may have limited or nonexistent coverage in the event that their home is hit by a flood, hurricane, tornado or landslide.

Those who live on flood plains or active faults may find that they have to purchase a supplemental insurance policy to protect their home from area-related disasters. Such high-risk areas include those with a high incidence of wildfires, hurricanes, volcanoes, landslides and earthquakes, among others. Even if a general insurance policy covers natural disasters common to these areas, homeowners may still face higher premiums to cover the increased risk.

Although an insurance policy may cover one type of damage from a natural disaster, related damages may not be covered. For example, flood-related damages are not typically covered under general homeowner policies, with the exception of flood-related damage to plumbing. Likewise, different types of flooding may be treated differently under the same policy.

Homeowners in high-risk areas for flooding may also purchase government-subsidized disaster insurance through the National Flood Insurance Program. Hurricane coverage may also vary as wind-related damage is generally covered, while flooding from storm surges is not. The different ways in which insurers may define damage related to natural disasters is a common cause of insurance disputes. There are numerous private supplemental insurance policies that may be purchased through insurance companies that are specific to the type of disaster for which protection is needed.

Source: Findlaw, "Does Homeowner's Insurance Cover Natural Disasters? ", January 05, 2015

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