When lava began flowing from the Kalapana Volcano in Hawaii, there were 35 buildings – many of them homes – that took the brunt of related damage. This article will deal with the insurance matters. While not all inclusive, standard insurance can cover some form of the loss.
Homeowners Insurance: Are policyholders financially protected from volcanic overflows and related disasters?
Auto Insurance: Are insured drivers shielded from the monetary losses of a volcano or earthquake eruption?
For those in Hawaii that suffered from the volcanic eruption, a standard homeowners and/or auto insurance policy covers specific aspects, but not all as there are damages that are excluded in the coverage.
The following lists associated coverage and lack of coverage.
• Home-owners policies do protect against damages incurred to property from a volcanic emission that is the result of an eruption, flying shock waves, ash, dust, and lava flow. It also will cover damage resulting from fire or explosion that is triggered from a volcanic eruption.
• Comprehensive auto insurance coverage will cover auto damages suffered from direct and sudden volcanic eruptions.
• Damages from car accidents that occur during a volcano’s eruption or following it are covered under your auto policy.
• Standard homeowners insurance will not protect you from earthquake, tremor, landslide, mudslide and other earth movement losses.
• A typical home policy will not shield the policyholder from flood damage. Only flood insurance will do that.
• The costs associated to preventing volcanic eruption damage prior to occurrence are not reimbursed by general homeowners’ coverage.
• There is a time limit to coverage for home or auto coverage that covers losses related to volcanic dust or ashes.
With all the exclusions involved in standard coverage, you may ask: why didn’t those suffering from the volcanic eruption in Hawaii have specialized volcano insurance?
The answer is fairly simple, as it is eye-opening.
The insurance industry does not provide Volcanic Damage Coverage!
For those that live in a risk exposed area, the safest way, then, to ensure monetary protection is to add an all-risk type of plan to the standard home policy. Though it is an alternative, the downside is that such indemnity is hard to find with a premium price tag that is extremely expensive.
The details of the above are too intricate to list in this essay. As always, the best resource is contacting an experienced, highly knowledgeable independent insurance agency about the topic – one that makes it a priority to enlighten customers and make them educated clients.