Homeowners can purchase a “difference in conditions” (DIC) policy to protect their homes against landslides. Those who live in areas susceptible to landslides or other earth movements should consider a DIC policy.
This article will cover:
Why aren't landslides covered with standard home insurance?
Landslides are unpredictable and they make the surrounding area extremely unstable. According to the Insurance Information Institute, a landslide is “caused by the movement of destabilized land — due either to gradual erosion or an accumulation of water.” It's also considered a type of earth movement, which is excluded from standard homeowners insurance.
Because of the unpredictable nature of landslides and because landslides can cause a lot of costly damage, standard homeowners insurance excludes them as a covered peril. If landslides were included in standard home insurance, the average homeowner would not be able to afford the premiums.
What is a difference in conditions (DIC) policy?
DIC policies differ from homeowners insurance policies in that they cover catastrophic events not usually covered by standard homeowners insurance. That includes landslides and mudslides. Elevated regions such as coastal bluffs and hilly areas with frequent rain are much more likely to need protection from landslides. If you live on flat, arid land, your risk for landslide is low compared to someone living on a hillside.
While a DIC policy is the most popular option for homeowners worried about landslides, you should know it only covers the structure of your home. To cover your belongings in the event of a landslide, you'll want to get a contents coverage rider. This is an endorsement you add to your home insurance that covers the contents of your home from damage due to covered perils, which include landslides.
What does a DIC policy cover?
A difference in conditions policy covers damage due to many high-risk perils that a standard homeowners insurance policy doesn't cover, such as:
- Rain runoff
In terms of coverage specifics, a DIC policy covers the cost to rebuild the home to its original condition after damage due to the policy's listed covered perils. It's important to know that a DIC policy won't cover the cost to stabilize the ground after a landslide, nor any safety updates that need to be done to prevent future damage.
How do I get landslide insurance coverage?
You can only purchase difference in conditions policies through the surplus lines market, which sells high-risk insurance that standard insurance companies don't provide. For example, they may sell policies to people who live on steep slopes or in other areas prone to landslides. If you're not sure how to find a surplus line insurer, check with your state insurance commissioner's office.
Another option is to talk to someone at your current homeowners insurance company about how you can purchase this kind of policy. They may have recommendations if they provide home insurance coverage in an area prone to landslides.
Do I need coverage for landslides?
If you live in an area that is prone to landslides, you need extra coverage to protect your home and belongings. If your house is located on an elevated region such as coastal bluffs and hilly areas with frequent rain, you are much more likely to need protection from landslides. If you live on flat, arid land, your risk for landslide is minuscule compared to someone living on a hillside.
How much does landslide coverage cost?
Difference in conditions insurance can be expensive. This is due to the high deductible. You may need to pay thousands of dollars before your insurance kicks in. Premiums usually cost anywhere from a few hundred to a few thousand dollars per year, depending on the risk level of the area where the house is located.
Does earthquake insurance cover landslides?
Although earthquakes can trigger landslides, earthquake insurance will not cover landslides. You will need to purchase a DIC policy if you want to protect your home against landslides.
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