What Does Natural Disaster Insurance Cover?

June 7, 2023
Men pushing a car down a flooded street. Photo credit: Saikiran Kesari.Men pushing a car down a flooded street. Photo credit: Saikiran Kesari.

Understanding Natural Disaster Insurance Coverage: A Guide for Insurance Brokers and Agents

Natural disaster insurance policies typically cover the following types of events that can cause significant damage to property, infrastructure, and natural resources:

  • Hurricanes: High winds, heavy rainfall, and storm surges.
  • Floods: The result of heavy rainfall, overflowing rivers, or coastal storm surges.
  • Earthquakes: Ground shaking, surface rupture, and tsunamis.
  • Wildfires: Uncontrolled fires that devastate large areas.
  • Tornadoes: Powerful rotating winds.

Coverage may vary based on location and specific policy details. An insurance policy in a coastal region, for example, may have different coverage for hurricanes than one in an area prone to disasters such as earthquakes. To assess your clients' coverage needs accurately and provide them with the right protection, it's important to understand the likelihood and potential financial consequences of different types of natural disasters.

Examples of what natural disaster insurance covers.

Policy Exclusions and Limitations

It's common for traditional insurance policies to exclude or offer limited protection for natural disasters such as:

  • Floods and Earthquakes: Many standard policies exclude flood and earthquake damage coverage, requiring separate endorsements or policies.
  • Land Movement: Some policies exclude coverage for damages caused by land movements, like landslides or sinkholes.
  • Gradual Damage: Coverage may be excluded for damage that occurs gradually over time, such as erosion or mold.

Working with knowledgeable insurance providers can help you and your clients avoid unpleasant surprises when disaster strikes. Overlooking a flood exclusion in a policy, for instance, could result in significant financial losses if a client's property is affected by flooding. You must carefully review all insurance products offered to you by a B2B so that you can readily answer whatever questions your clients may have about any possible coverage gaps before a natural disaster occurs.

Supplementary Coverages and Endorsements

Supplementary coverage options, like endorsements or amendments to an insurance policy, can be tailored to address your clients' unique risk profiles. Some common supplementary coverages include:

  • Flood Insurance: Separate flood insurance policies can cover flood-related damages not covered by standard natural disaster insurance.
  • Earthquake Insurance: A specialized policy or endorsement can cover earthquake damages, often excluded from standard policies.
  • Sewer Backup Coverage: This can protect against damage caused by sewer or drain backups, which standard policies may not cover.

Customizing your clients' coverage ensures that their properties and financial assets are protected from serious weather events. Working closely with experienced insurance providers will allow  you to secure coverage that best suits your clients' needs.

Open communication with insurance providers, and awareness of policy details, can enhance your clients' financial security following a natural disaster. For more information on policy selection and working with experienced providers, please consider exploring our related blog posts or reaching out to one of our climate-solutions experts at


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