Homeowners Beware: Landslides Could Be the Hidden Danger Your Insurance Won't Cover

In recent years, the destructive power of natural disasters has become an ever-present concern for homeowners, particularly in states like California, Alaska, and North Carolina. While most individuals are acutely aware of the dangers posed by wildfires and floods, the risk of landslides often flies under the radar. Recent events have starkly illustrated the potential devastation these phenomena can wreak on homes, leaving many to wonder if they are adequately protecting their properties. Take for example the recent experiences of homeowners in Pacific Palisades, California. Just as many felt a sense of relief after their homes survived the ravages of wildfire, they were suddenly confronted with the reality of landslides tearing their properties apart. Similarly, a few months prior, Hurricane Helene unleashed its fury on the Appalachian Mountains, inundating areas like Asheville, North Carolina, with nearly 30 inches of rain in a matter of days. The resulting flooding triggered mudslides that wreaked havoc, engulfing homes in a deluge of debris. These events serve as critical reminders of the increasingly volatile weather patterns we have been witnessing. A standard homeowners insurance policy, however, typically falls short in coverage when it comes to the aftermath of such disasters. While flood insurance, largely provided through FEMA's National Flood Insurance Program, can cover certain flood-related damages, it does not extend to landslides or mudslides triggered by those floods. Understanding the difference between a mudflow and a mudslide is vital. The National Flood Insurance Program defines a mudflow as “a river of liquid and flowing mud on the surfaces of normally dry land,” which is covered under their policies. In contrast, when water accumulation causes earth, rocks, and debris to rapidly slide down a slope, homeowners are often left unprotected if they have not taken proactive measures to secure landslide insurance. Michael Orefice, a senior vice president at SmartFinancial, underscores the urgency of this issue: “Landslides can occur in any state, but they are more common in areas with steep slopes, especially where the underlying materials are weak or fractured. Homeowners should assess their properties’ risk based on these factors.” Areas such as the Pacific coastline, the Appalachian and Rocky Mountains, and specific regions in Alaska and Hawaii are particularly susceptible to landslides, especially given the increase in heavy rainfall and seismic activity. Therefore, homeowners in these regions may want to consider obtaining a Difference in Conditions (DIC) policy, which can cover the gaps left by standard insurance policies, including damages from landslides. For instance, a homeowner in a high-risk area might find that their standard policy excludes landslide damage, leaving them vulnerable after a disaster. However, those who have opted for a DIC policy could find themselves covered for significant repair costs that would otherwise go unmet. “One of my clients experienced mudslide damage, but the resulting structural issues were classified as landslide damage,” shares Ben Klesinger, co-founder of Reliant Insurance Group. “Fortunately, their DIC policy provided $200,000 in necessary repairs that the standard policy did not cover.” Property owners are encouraged to seek out specialty insurers familiar with the unique risks of their locales. Customization options are also available, allowing homeowners to tailor their coverage to their specific needs, which can include debris removal, temporary relocation costs, and land stabilization. Of course, premiums for landslide insurance can vary significantly based on risk factors, with homeowners in high-risk areas potentially facing annual costs ranging from several hundred to several thousand dollars. A $300,000 home in a precarious location might expect to pay approximately $1,000 or more per year for adequate coverage. Ultimately, the time to act is now. As climate change continues to reshape the landscape of natural disasters, homeowners must remain vigilant and proactive in safeguarding their properties. By understanding the nuances of their insurance coverage and the specific risks associated with their geographical locations, they can take informed steps to protect their homes against the unpredictable forces of nature.