Damage due to natural disasters such as storms, rainfall, or earthquakes – does your home insurance cover them?

Damage due to natural disasters such as storms, rainfall, or earthquakes – does your home insurance cover them?

Typically, when people insure their homes, the damage they have in mind is often related to burglary or fire. However, in reality, most damages in homes result from water issues, often caused by burst pipes.

For this reason, at Segal Insurance and Finance, we prefer to give our clients cover to repair burst pipe damage with a plumber of their choice.. What about water damage caused by heavy rainfall? The fundamental answer is usually no. While there is coverage for natural disasters in the policy, it applies to extraordinary situations. Therefore, water damage resulting from a sealing problem is not generally covered since this is to do with wear and tear and should be dealt with by the property owner.

To receive compensation for damages caused by natural disasters, one needs to prove that it is indeed an exceptional situation. For example, winds exceeding 60 km/h or an unusual amount of rainfall. Even in situations where the insured has some responsibility for the damage, there might not be coverage.

Structures that are poorly built or dislodged due to strong winds are often contested by insurance companies, claiming that the responsibility, or at least part of it, lies with the insured. Of course, there are gray areas, and in such cases, insurance companies often rejects the claim. In these situations, the insurance agent serves as a kind of legal representative. The agent maintains a continuous relationship with the insurance company, understands the nuances of the policy, and knows which claims and demands can be brought to the insurance company to maximize the policyholder’s rights.

One of our clients experienced severe flooding due to very heavy rain. While theoretically, floods are not covered in the policy, the insurance company acknowledged that it was an extraordinary event and was obliged to pay the full amount of the damage. Similarly, damages resulting from an earthquake are covered by the building insurance policy. Although it is a rare event, in such cases, the damage can be extensive, and it is wise to be covered for such an event.

Despite earthquakes seems like an unlikely scenario belonging to faraway regions, in recent years, they have made headlines even in Israel. The last significant earthquake in Israel occurred about a hundred years ago in 1927, and a hundred years before that in the Safed region so the seismologists think it is only a matter of time. Officially, there is no government compensation fund for earthquake cases in Israel. In emergency situations, there is a possibility that the government will allocate the government compensation fund for the public interest, but it is not advisable to rely on it.

In the case of an earthquake, there is a higher deductible than usual, set at 10% of the cover in the policy. There is an option to reduce the deducible by paying an additional premium.

In the event of an earthquake, the expectation is total damage to the property. In such a case, the amount paid for the damage is the total sum insured. Typically, this ranges between 6,000 to 8,000 shekels per square meter.

In a case of total destruction of the building due to an earthquake, if even one of the residents in the building is not insured or unwilling to pay, all residents are in trouble. Our recommendation at Segal Insurance and Finance for insured individuals living in a an apartment building is to increase the insurance coverage to reflect the true value of the apartment. This extra cover is not expensive since it is intended only for an earthquake scenario.

In the case of natural disasters or any other damage to the apartment, contact the insurance agent and follow their instructions. Ensure that the financial expenses are coordinated with the agent and the loss adjustor to guarantee satisfactory compensation by the insurance company.