Purchasing a home may be the biggest investment you ever make. The result is that your home typically becomes your largest debt, which hopefully, over time, turns into one of your largest assets. But regardless if it is a large asset or debt, you will want to purchase homeowners insurance to protect yourself in case of an unforeseen loss. Homeowners insurance policies are typically ‘all perils’ policies which cover you from a number of common risks including fire, smoke, lightening, windstorm, theft, vandalism, and falling objects.
The typical homeowners insurance policy does not cover flood, mudflow, earthquake or landslides. Flood (including mudflow coverage) and earthquake insurance policies are common and easy enough to purchase. However, landslide insurance is only available through certain surplus line (i.e. specialty) insurers. It can be hard to purchase and very expensive if available. In a recent discussion I had with an insurance broker, he noted the case of a homeowner who recently purchased landslide insurance from Lloyds of London, and ended up paying more than 4 times their annual standard homeowners insurance premium.
When purchasing a home you should seriously consider all potential risks. Hire a professional to assess the potential for flood, earthquake and landslide risks. If there is landslide risk recognize that insurance for this risk may be very difficult to purchase and expensive if available. Make sure to factor this into your purchasing decision.