Specialty Coverage Types: Flood, Earthquake, Umbrella, and More

Standard home, renters, and auto policies cover a lot, but they are not designed to cover everything. Some of the biggest risks, like floods, earthquakes, and very large lawsuits, are usually excluded or capped. Specialty coverage fills those gaps. Here is how the most common types work.

Overview

Coverage	Gap it fills	Where it usually comes from
Flood insurance	Flood damage excluded by standard home and renters policies	The National Flood Insurance Program or private flood insurers
Earthquake insurance	Earthquake damage excluded by standard policies	A separate policy or an endorsement, depending on the state
Umbrella liability	Liability costs above your home and auto limits	An add-on policy, often from your home or auto insurer
Scheduled personal property	Valuables above standard special limits	A rider or floater on your home or renters policy

Flood insurance

Most standard homeowners and renters policies exclude flood damage, which generally means water that rises from the ground or comes from outside, such as overflowing rivers, storm surge, or heavy rain pooling around a home. Flooding can happen well outside mapped high-risk zones.

In the United States, flood coverage is available through the National Flood Insurance Program (NFIP) and, in many areas, private insurers. A few points to know:

• Waiting periods — NFIP policies generally have a 30-day waiting period before coverage starts, with limited exceptions.
• Building vs. contents — building coverage and contents coverage are often separate, and renters can buy contents-only coverage.
• Limits — NFIP policies have maximum limits; private flood or excess flood policies may offer higher amounts.
• Lender requirements — if you have a federally backed mortgage in a high-risk flood zone, flood insurance is usually required.

Earthquake insurance

Earthquake damage is excluded from most standard home policies. Coverage is usually bought as a separate policy or an endorsement. In some states, such as California, a state-affiliated program is a major source of coverage.

Earthquake coverage often comes with a percentage deductible, commonly 10% to 20% of the dwelling limit, which can mean a large out-of-pocket amount before coverage applies. Some policies let you choose separate limits for the dwelling, belongings, and additional living expenses.

Earthquakes are not only a West Coast concern; several other regions have seismic activity. Your state’s insurance department or geological survey can help you gauge local risk.

Umbrella liability insurance

An umbrella policy adds a layer of liability protection on top of your home, renters, and auto policies. If you are responsible for a serious accident and the costs exceed your underlying limits, the umbrella can pay the difference up to its own limit, often sold in $1 million increments.

Umbrella policies may also cover some claims your other policies do not, such as certain libel or slander claims, depending on the policy.

Things to know:

• Underlying limits — insurers usually require minimum liability limits on your home and auto policies before they will sell an umbrella.
• Who might consider it — people with significant assets, a teen driver, a pool or trampoline, rental property, or a higher public profile.
• Price — often modest compared to the coverage amount, though it varies by insurer, state, and household.

Scheduled personal property and riders

Standard home and renters policies usually set special limits for certain categories of belongings, such as jewelry, watches, furs, art, collectibles, firearms, and silverware. A theft limit of a few thousand dollars on jewelry, for example, may not come close to the value of an engagement ring.

A scheduled personal property endorsement, sometimes called a rider or floater, lists specific items with their appraised values. Benefits can include:

• Coverage up to the scheduled value.
• Broader protection, sometimes including accidental loss, like a ring slipping down a drain.
• Often no deductible, depending on the insurer.

You will usually need a recent appraisal or receipt for each item, and it is wise to update appraisals every few years.

Other specialty coverage worth knowing

• Sewer and drain backup — an endorsement for water that backs up through drains.
• Equipment breakdown — covers home systems and appliances failing from mechanical or electrical issues.
• Identity theft restoration — helps with costs and services after identity theft.
• Home-based business — covers business equipment and liability beyond low standard limits.

How to decide

Look at the gaps in your current policies, consider what you could afford to cover yourself, and weigh your local risks. Your agent or insurer can explain what options exist in your state.

General education only — not personalized insurance, legal, or financial advice. CoverFind is not an insurance agency and does not sell policies.