Making a Claim for Environmental Hazards

An environmental hazard is an outside force that you can’t control, even though it could ruin your home and everything inside it. A standard homeowners insurance policy offers protection from many different types of environmental hazards, but some very common types aren’t covered. 

Keep reading to find out how insurance companies deal with environmental hazards and how you can file a claim when the unexpected happens. 

4 Key Facts About Environmental Hazard Claims

Does Homeowners Insurance Cover Environmental Hazards? 

Damage caused by many disasters is covered by a standard homeowners insurance policy, but there are exceptions.[2] 

A standard plan will protect you from hazards like wind, explosions, smoke, and volcanic eruptions. Your policy should help you pay to repair or rebuild your home after these disasters. Some policies also cover needed repairs to structures like garages and tool sheds. 

Some environmental hazards are so expensive that insurance companies refuse to cover them. Common problems like earthquakes and flooding are typically excluded from a homeowners insurance plan. If you want protection for these events, you need an additional policy or rider. It’s critical to read your policy carefully to understand what is and is not covered. 

Hazard vs. Homeowners Insurance: Breaking Down Coverage 

Hazard insurance is part of a standard homeowners insurance plan. Typically, the term refers to coverage for your home’s structure based on common problems (or perils). 

Many mortgage companies use the term hazard insurance when talking to their clients. To protect their investment in your home, a lender will require you to save the structure from devastating problems. They might tell you to buy a policy with a specific level of hazard insurance. Don’t be confused. You’re not required to purchase a separate product, as hazard insurance is part of your homeowners insurance plan. 

Other parts of your homeowners policy that might not be considered hazard insurance (at least to a lender) include the following:[2]

• Possessions: Most homeowners insurance policies will reimburse you to repair or replace items like furniture or clothing damaged through a covered event. Typical coverage is 50% to 70% of the amount of insurance you carry for the home’s structure. 
• Liability: Your policy may protect you against lawsuits due to actions by you or your pets. Most policy limits start at about $100,000.
• Additional living expenses (ALE): If your home is damaged, this coverage will help you pay for room and board until you move back in. Policy limits vary dramatically. 

What Types of Damage Are Covered by Homeowners Insurance?

The best answer to most coverage questions is the following: It depends. Whenever you file a claim, the insurance company will investigate. Even seemingly simple claims can be denied if the adjuster discovers evidence of neglect or tampering. 

This chart can help you understand what is typically covered and what is not. Remember that your experience may vary. 

	Always Covered	Sometimes Covered	Rarely Covered
Fire and lightning	X
Windstorm or hail	X
Explosion	X
Riot or civil commotion	X
Aircraft-caused damage	X
Vehicle-caused damage	X
Smoke	X
Vandalism	X
Theft	X
Volcanic eruption	X
Falling objects	X
Weight of ice, sleet, or snow	X
Water or steam discharge from appliances or sprinklers	X
Freezing of plumbing, appliances, and sprinklers	X
Electrical surges	X
Flooding			X
Earthquakes			X
Mold			X
Insects or rodents		X
Sewer backups			X

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Damage Not Covered by Homeowners Insurance 

Most insurance policies come with exclusions—hazards your homeowners insurance won’t pay to repair. Understanding your exclusions is a critical part of your job as a homeowner. If you’re at high risk of damage from something your company won’t pay for, you should consider an additional policy to ensure you’re protected. 

Most homeowners insurance policies don’t cover damage from the following environmental perils:[3]

• Flooding
• Slow leaks 
• Bug or rodent infestations (unless the problem is sudden) 
• Earthquakes 
• Sewer backups 

You can buy policies to protect you from hazards like flooding and earthquakes. You can also ask your insurance company for extra coverage (sometimes called endorsements) that can increase your payouts and cover exclusions like mold, earthquake damage, and sewer backups.[3]

How to File a Claim for Environmental Hazards 

If your home is damaged by a covered peril, filing a claim is the best way to trigger your policy’s protections. Getting started is relatively easy, but know that the whole process can be time-consuming. 

Start the claims process with these steps:[4]

1. Put safety first. Some environmental hazards cause such extreme damage that you’re forced to evacuate. Never put your health or future at risk by staying in place when authorities tell you to leave. 
2. Contact your agent. Tell the company that you need to file a claim for a covered peril. Ask if you need to fill out a form to start the process. 
3. Document your losses. When it’s safe to return home, take photos and videos of the damage left behind. Go room by room and capture everything. The more evidence you have, the smoother the claims process will go. 
4. Make emergency repairs. Take steps to prevent more damage (such as boarding up broken windows and missing doors). Keep receipts for any supplies you purchase for emergency repairs. 
5. Participate in an inspection. Your insurance company will send an adjuster to your home to assess the damage. Be there during the visit and provide all of the proof you’ve gathered about your losses. 

Your insurance adjuster will offer a potential payout amount. If you agree, you can accept the check and get started on repairs. If not, you’ll negotiate and find a settlement you both agree to. 

When Should You File a Claim?

Your homeowners insurance policy can offer robust protection when you need it, but it pays to use your plan with care. 

When an environmental peril hits, your insurance company will subtract your deductible from the potential payout.[5] If your claim is smaller than your deductible, or the difference between the two is tiny, it might make sense to pay for repairs yourself. 

Insurance companies log claims in a shared database. If you use your policy too often, your insurance provider may not renew your coverage.[6] New potential insurance partners might make the same decision. When it’s hard to get insurance, your costs and stress levels can skyrocket. 

If your claim is large and complex, filing for payment makes sense. These situations are tailor-made for homeowners insurance. But don’t be afraid to explore your options before filing. You may discover that a DIY approach is the best one for you when you consider the whole picture.