Does Car Insurance Cover Damage from a Natural Disaster?

If we have learned anything from witnessing the devastation in Haiti and Japan from earthquakes recently, it's that natural disasters can strike at any time. In addition to taking lives and causing countless injuries, natural disasters can also inflict severe financial damage. This is why it is important to determine whether your car insurance coverage is adequate.

Comprehensive Car Insurance Coverage

Comprehensive car insurance coverage is the category in which natural disasters fall. Comprehensive covers damage caused by "acts of God," such as tornadoes, hurricanes, earthquakes and fires. What you might not realize, however, is that comprehensive coverage does not always include all natural disasters.

For example, in many areas of the United States, flooding is excluded from car insurance coverage. The reason is obvious; so far in 2011 alone, four of the seven emergencies declared by FEMA have been related to flooding. Auto insurance companies realize that flooding is common, so they don't want to include it as covered damage. The problem is that flooding is one of the natural disasters we are most likely to experience.

Finding Car Insurance Exclusions

To determine whether your car insurance coverage is adequate for natural disasters, it is necessary to read your policy documents. There you will find any named exclusions for your comprehensive coverage; if they list flooding, for example, they won't cover a claim when your car is submerged on the street.

There might be other exclusions as well. Insurance companies use variables to determine risk. If you live in an area where earthquakes happen on a regular basis, it might be named in your policy as an exclusion. This is important to know, so you can make the necessary adjustments.

Adding Natural Disaster Insurance

If a certain natural disaster is not part of your car insurance coverage, you may be able to purchase additional insurance to cover it. This is often offered in the form of a rider, which is an amendment to an existing policy.

Of course, you will want to weigh the benefits and expenses of certain types of car insurance coverage. If you are driving an older vehicle, for example, it might not be worth it to pay extra for insurance to cover natural disasters. If a hurricane strikes, it is possible it would be less expensive to simply replace the car than to pay for extra coverage every month.

Additionally, consider the probability of certain natural disasters. I live in Texas, for example, where earthquakes are not a concern. Buying extra car insurance coverage for earthquakes would be a waste of money.