What Is Earth Movement Coverage And Do You Need It?

You buy home insurance so that if something happens to your home, the insurance company will pay to rebuild it. While it sounds pretty simple, did you know that your home insurance policy may not cover every mishap that could destroy your home? One of the most commonly excluded perils is earth movements. Here's what you need to know about earth movements and how to make sure you're properly insured.

What is an Earth Movement?

An earth movement isn't special legal language. It follows its name literally.

If the ground on which your home was built moves, it's considered an earth movement. This includes shaking during earthquakes, sinking from sinkholes, sliding off of a cliff or into a riverbank, and other shifts.

Are Earth Movements Standard Coverage?

Earth movements are generally excluded in whole or in part. Depending on the region and insurance company, all movements of the earth may not be covered, or only specific movements may be excluded.

For example, California insurers might not cover earthquakes in the general policy, and Florida insurers might exclude sinkholes. To know what coverage you have, look for either the general term earth movement or for specifically named mishaps in both the inclusions and exclusions lists.

Why Are Earth Movements Not Covered?

Insurance is based on risk minimization. The insurance company wants to make sure it can pay out all claims while still paying its employees and shareholders.

Depending on the area, earth movements may add a lot of risk to the typical policy. The risk of earth movements also varies greatly even within the same state.

Rather than increasing insurance premiums for everyone to match this risk, insurance companies exclude earth movements from the general policy and offer separate coverage at a premium that accounts for the risk.

Do You Need Earth Movement Coverage?

Because of the added cost, many homeowners might think about going without earth movement coverage. There are a few things you need to consider.

First, if you have a mortgage, you may be required to carry earth movement coverage. The bank can require insurance to protect its investment while you repay your loan.

Second, an earth movement will usually cause major damage to your home. Even if the risk of an earth movement is low, would you be able to cover the cost to rebuild?

To learn more about making sure your home is adequately insured, contact Hope & Harder Insurance Brokers or a similar company.