Does Homeowners Insurance Cover Volcanic Eruptions?

Natural disasters are uncommon, but not impossible. Depending on where you live in the United States, some extreme weather patterns may be more common than others. In Hawaii and the Pacific Northwest, the possibility of volcanoes and the damage they can cause is a concern most Americans don’t have.

So, you might be wondering if standard homeowners insurance covers volcanoes, or if you need particular volcano or lava insurance. Let’s take a closer look. 

Yes, volcanic eruptions are a specifically named covered peril in most standard homeowners insurance policies. But, the extent of coverage and exact causes of damage that are covered vary by policy and provider. 

If your home is directly damaged by a volcanic eruption, you should be entitled to some coverage. This typically includes damage from the blast itself, like rocks or other particles flying through the air, and sonic waves from the blast.

The HO3 form is the most common type of homeowners insurance. Regarding volcanic eruptions, your HO3 form could have a statement that reads your insurer “will pay for the reasonable expense for the removal of ash, dust, or particles from a volcanic eruption that has caused direct loss to a building or property contained in a building.” So, in addition to property damage caused by the eruption, your insurer will also cover the costs to remove debris from a volcano that’s damaged your property.

But, the extent to which lava flow from a volcano is covered varies by company. Some insurers may cover lava damage and fires that result from lava, as fire is also a commonly covered peril. Some may not, though.

We’ll have more information on lava insurance later, but be sure to consult your provider to check whether damage from lava is covered by your policy.

Also, insurance companies may give you a window of time for which your volcanic coverage may be good. For instance, all eruptions that occur within 72 hours may be considered one eruption.

Volcanic activity is sometimes accompanied by earthquakes. It’s important to note that home insurance won’t cover damage from earthquakes or tremors that result from an eruption. Earth movements like earthquakes, landslides, and erosion are typically excluded from homeowners insurance policies. If you’re concerned about this, you may want to look into an earthquake add-on or separate earthquake insurance.

Speaking of earthquake insurance, you might be aware of separate insurance policies available for specific types of natural disasters, like flood insurance, earthquake insurance, or sinkhole insurance. However, such coverage doesn’t exist for volcanoes. There’s no such thing as specific volcano insurance.

It’s believed that volcanic eruptions are too rare and too destructive for a carrier to dedicate coverage solely to volcanoes. If you live in a part of the country that may be affected by volcanoes or volcano damage, your homeowners insurance should grant you some protection from them, as we mentioned earlier. You should check with your insurance provider to understand what’s covered under your policy and what isn’t. 

If your homeowners insurance policy includes coverage from volcanoes, it doesn’t cost any extra to have that protection. But, the cost of your home insurance is affected by several factors, and if your risk of damage from a volcanic eruption is particularly high, you may pay more for insurance overall.

Protection from volcanoes usually applies to your dwelling, other structures, and personal property. To sufficiently protect your property, you need to insure your home for its complete replacement cost. This primarily concerns your dwelling coverage. If you have a high risk of destruction from volcanoes, you’ll want to be sure you have enough coverage for the worst-case scenario.

The other aspects of your policy are usually based on a percentage of your dwelling coverage. So, once you have enough dwelling coverage, you can adjust your other structures and personal property coverage accordingly.

If you’re unsure what levels of protection you should have, call your insurance provider for more details. Also, if you haven’t updated your policy recently, your coverage may no longer be sufficient. The replacement cost of homes changes over time, so you’re not necessarily safe if you set your policy a decade ago and haven’t changed it since.

The question of volcanoes and homeowners insurance may be the most pressing in Hawaii, the state with some of the most active volcanoes in the country. The U.S. Geological Survey creates volcano hazard maps for the island that separates the island into 9 zones based on the risk of a lava flow.

Zone 1 and 2 are the zones with the highest risk of lava flows. If you live in these areas, you may find it very hard to get home insurance due to the increased threat of volcanic lava. It could scare off most companies. If you do get coverage from a private insurer, they may want to exclude lava damage from your homeowners policy.

If you can’t get coverage from any private insurance company in one of these zones, you can turn to the Hawaii Property Insurance Association (HPIA). This is a state-backed insurer of last resort that provides policies for those who can’t get coverage anywhere else. 

Plans from the HPIA offer up to $350,000 of dwelling coverage and may be relatively costly. Available deductibles are $500, $1,000, $2,000 or $3,000.

Homeowners insurance may cover damage from lava flows that directly result from a volcanic explosion. But, you’ll need to check with your provider to be sure.

Damage from fires that result from lava could be covered. But, lava flows are often slow, and if your insurer believes you had the opportunity to move some of your personal belongings out of the way of the flow and didn’t, you may not be fully covered. Also, if the lava came from a separate crack in the ground, and not directly from an erupting volcano, your coverage may be limited.

If lava that’s hardened into rock cracks or splits and causes damage to your home, this resulting damage may not be covered, either. Your provider might consider this an earthquake, and earthquakes are excluded from homeowners insurance policies.

Also, if your house is made inaccessible by lava but not actually damaged, like if your home becomes surrounded, your insurer might not cover you.

If you want specific protection from lava, it’ll likely cost you quite a bit. If you live in a high-risk lava flow zone, you might need to look to a surplus lines insurance carrier based out of the state for coverage. If they offer you home insurance with volcano coverage, it may cost over $3,000 per year. 

And, an insurance policy with lava coverage in a high-risk zone may come with higher deductibles. Common home insurance deductibles are between 1% and 10% of your dwelling coverage limit. Coverage in this high-risk scenario could be 10%.

So, if your home is covered for $250,000 with a 10% deductible, you wouldn’t be able to file a claim for lava damage (or any other damage) unless you incur at least $25,000 of damages.