Landslides, mudslides not covered by typical homeowners policy

As if the devastation and loss aren't enough, some Snohomish County slide victims are getting more bad news when they call about their homeowners insurance. They're learning their homeowners insurance policy does not cover mud or landslides. It's an issue that comes up every time the land gives in and causes damage.

Walking through the shambles of your biggest investment, you might be thankful that homeowners insurance will help rebuild much of what you've lost. But every year, thousands of homeowners discover they're mistaken.

"I think folks think that because they have homeowners insurance, they have coverage for anything related to their home," said Northwest Insurance Council President Karl Newman. "A homeowners policy is designed to cover typical risks that everybody has. That would be wind, and fire, and burglary- things of that nature. In Western Washington, we're in a higher risk earthquake area. We've chose to live here. As a result, you have folks in Eastern Washington not at that same risk. The idea is, let's not have them subsidizing those of us who've chosen to live in an earthquake zone."

That's why damage caused by earth movement is specifically excluded from most homeowners insurance. Landslides and mudslides require special coverage called Difference in Conditions- which provides money to rebuild your home in a mudslide or landslide situation. Depending on risk factors, such as slope of your property or proximity to a susceptible area, for special coverage to rebuild a $300,000 home you could expect to pay around $1,000 or more a year.

Newman says that may seem pricey compared to the average homeowners premium of just under $600 bucks but you have to keep in mind, you're protecting what is likely the largest single investment you'll ever make.

"When you combine the two together, let's say it was $1,500 a year plus your homeowners policy- you're still talking about less than what it would cost to insure 2 cars for full coverage with newer vehicles," Newman said.

Snohomish County slide victims without special coverage will likely get help from FEMA in the way of limited grants, and low-interest loans that will have to be paid back- possibly in addition to the mortgage payments on homes that are gone. People in the slide area are asking Rep. Suzan Delbene and state regulators for help at least getting mortgage relief- like that given to victims of hurricane Katrina. In the meantime everyone with homeowners or renters insurance is urged to review their policies and risks- and make sure they understand what's covered, and what's not.