Volcanic eruption risk and insurance coverage:

Recent events in Hawaii have highlighted the devastation that can occur due to Volcanic activity.  It’s important to understand Volcanic eruption risk and appropriate insurance coverage.  This is a quick summary for those of you interesting in understanding how insurance would apply.

To understand your risk, please review the list of active volcanoes.    This list will help you understand your exposure to volcanic activity.

Most homeowners, renters, business insurance policies provide coverage for property loss caused by volcanic eruption when it is the result of a volcanic blast, airborne shockwaves, ash, dust, or lava flow.  Fire or explosion resulting from volcanic eruption also is covered.

Homeowners and business owners policies also typically provide coverage for property damage, vandalism, or theft due to looting while people leave their home during the time they are displaced or away from their homes due to a covered event.

As a business owner, please note there is typically a waiting period before Business Interruption coverage is covered.

Lava damage to vehicles is covered under auto comprehensive policies, if selected.

It is easy for customers and brokers to forget this coverage – as this type of volcanic and loss activity is relatively rare compared to other forms of loss.  However, when it happens it reminds us about the beauty of insurance.

Important to note, items typically not covered include damage from earthquake, landslide, mudslide, or other earth movement.  Damage to trees, land, shrubs, and property in open sheds is typically not covered.  Cost to remove ash from personal property, unless ash causes direct physical loss (also no coverage to remove ash).

See also...Mudslide: risk control actions you can take

Volcanic Effusion is not covered under a typical homeowners, renters, business insurance policy -see our discussion about Flood Insurance.

If you are at risk of volcanic activity, first and most importantly, get yourself and family to safety.   This article is food for thought for those who aren’t in active danger or those trying to understand exposure to loss.

Please comment below with questions, comments, or concerns.

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Arnold Smith

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