Business

Landslide, mudflow, flood and even earthquake insurance is available – at a cost

DEAR MR. MYERS: I know that most types of damage caused by hurricanes and other “high winds” are covered by a standard homeowners insurance policy. But what about mudslides, like the ones that recently wiped out so many homes in Southern California?

ANSWER: For better or worse (mostly worse), home insurers separate damage caused by Mother Nature in the wake of a major storm or flood into two distinct categories.

The first is “mudflow,” which covers damages if the homeowner has purchased a separate flood insurance policy. The second is “landslide,” which is not covered by either a standard homeowners policy or even a supplemental flood-insurance plan.

The key difference is that a mudflow typically is created after an unusually heavy storm, loosening nearby dirt and then swamping the home or yard. Damages created by the mudflow would be covered, but only if the homeowners had supplemented their regular homeowners policy with a flood insurance plan backed by the government’s National Flood Insurance Program or one of the handful of private insurance providers.

A landslide, sometimes called a mudslide, occurs when a mass of earth or rock tumbles downhill. Insurers consider a landslide an “earth movement” event, so, like earthquakes, it isn’t covered by a standard homeowners policy. And because landslides typically don’t involve enough liquid to seep into a home, a representative for the nonprofit Insurance Information Institute says, damage that it may cause usually isn’t covered by a flood insurance policy either.

It’s worth noting that some companies offer a “Differences in Conditions” policy that provides all-in-one coverage for damages caused by landslides, mudflows, floods and even earthquakes. They are expensive and often require high deductibles, but they can help you sleep better at night if you can afford one.

One final note: If you pay extra for the optional comprehensive insurance protection on your automobile policy, damage caused to the vehicle by a landslide, mudflow, quake or flood also will be covered.

DEAR MR. MYERS: With the Super Bowl coming up, places like Best Buy and Walmart are offering some great deals on televisions. Is this the best time to buy one?

ANSWER: If you have your heart set on one particular type and model of TV, you probably should buy it now. Retailers offer some of the best deals in advance of football’s Super Bowl, which will be held on Feb. 4 in Minneapolis.

However, unsold units are sometimes sold at even lower prices in mid-February, when retailers begin clearing space for their new spring models.

REAL ESTATE TRIVIA: The median price of a typical U.S. home stands at about $250,000, according to the National Association of Realtors. The cost of a 30-second TV ad during this year’s Super Bowl starts at $5 million, Sports Illustrated reports.

DEAR MR. MYERS: We live in a neighborhood where most homes have 1,800 square feet of space or more, which is pretty large by our city’s standards. Sales here still are strong, but most of them recently involved buyers who are in their 60s, 70s or even in their 80s. Isn’t that unusual? Most of the older buyers I have known in the past wanted to “trade down” into much smaller properties, partly because their children had grown up and left to start families of their own.

ANSWER: True, the vast majority of senior buyers in the past opted to move into much smaller properties than the one that they had sold. But a variety of factors are beginning to change that long tradition.

A comprehensive survey of retirees by financial services giant Merrill Lynch and Age Wave, a consulting firm that specializes in aging issues, found that a surprising 30 percent of them chose to buy a house that was larger than the one that they had just sold. The remainder purchased property that was equal in size or a bit smaller.

The senior buyers who chose to upsize cited several reasons for their decision. With many Americans working later in life, some wanted extra space for a dedicated home office. Others needed more room to pursue their hobbies or to entertain friends.

Still others, anxious to stay physically fit as they grow older, needed a special area for their treadmill or other exercise equipment.

Many older buyers who decide to buy a bigger home still have their adult offspring in mind. It’s no secret that a countless number of grown children are staying in their parents’ home longer before moving into a place of their own, or are moving back later to save money after graduating college, losing a job or changing their marital status. A larger home can accommodate such changing needs.

David W. Myers’ column is distributed by Cowles Syndicate Inc.

  Comments