Volcano Insurance Guide

If you are living and working somewhere with active volcanoes, you need to think about the damage your property could take if there is a volcanic eruption.

Luckily, many insurance policies do provide at least some protection in case a volcano erupts. But there may be gaps in your coverage. Let’s go over what to look for and what you can do to shore up your protection with volcano insurance.

Does Homeowners Insurance Cover Volcanic Eruptions?

Homeowners insurance may include some coverage for volcanic eruptions. But this varies depending on your carrier and policy. Here is what your homeowners insurance may cover with respect to volcanic eruptions:

• Dwelling coverage in your homeowners insurance policy might help you cover the costs if you need to make repairs to your home following a volcanic eruption. If you have to rebuild your home due to an eruption, this coverage may also pay out. Damage from lava may sometimes be covered under fire damage (when the lava produces fire). Be aware that many policies have exclusions for lava damage, even in states like Hawaii.

• Personal property coverage may also be part of your homeowners insurance policy. If a volcanic eruption damages your property inside your home, then the policy may pay out for repair or replacements.

• Some homeowners insurance policies cover the cost to remove dust and ash from your home.

Check your homeowners insurance policy. If it does not have adequate coverage, or if there are exceptions for volcanic eruptions, you will need to buy additional forms of coverage.

Does Commercial Property Insurance Cover Volcanic Eruptions?

As with homeowners insurance, commercial property insurance may cover some damage from volcanic eruptions. Here is what your policy may protect you from:

• Commercial property insurance usually covers damage to your business property caused by particles such as dust and ash, or from a direct blast.

• Commercial cleanup costs related to ash and dust may be covered as well.

You will have to check your commercial property insurance coverage to make sure that there are no exclusions for volcanic eruptions.

Do Auto Policies Cover Volcanic Eruptions?

Yes, automotive policies do usually cover volcanic eruptions. That includes both commercial and personal auto policies. You will require comprehensive coverage if you want this type of protection.

Remember, personal auto policies do not cover vehicles while you are using them commercially. You have to get a commercial auto policy if you are using the vehicle for work.

Supplemental Insurance Policies You May Need If You Live Near A Volcano

The exact types of supplemental insurance policies you require will depend on where you are located, the specific risks you are facing, and what the exclusions and gaps are in your main insurance policies.

Here are some common coverage recommendations:

• Earthquake insurance: Even if your policy covers some types of damage that might result from a volcanic eruption, there is usually an exclusion specifically for earthquake or tremor damage. As earthquakes and volcanic eruptions often go hand-in-hand, it makes sense to purchase earthquake coverage as an endorsement. You can get it to go with a homeowners policy or your commercial policy.

• Flood insurance: Just as earthquakes are a frequent exclusion in insurance policies, the same goes for water damage. Since volcanic eruptions can damage pipes and/or cause leaks through damage to rooftops and walls, it is smart to get flood insurance too. Plus, an eruption could cause flooding to occur due to geological forces as well.

• Business interruption insurance: A volcanic eruption may cause you to have to pause your business operations due to damage to your building or vehicle, road closures, evacuations, etc. Business interruption insurance can help cover some of your lost income during this time, making it more likely your business will survive until you can reopen.

• Commercial auto insurance: We have already discussed commercial auto insurance, but it bears emphasizing that personal auto coverage is not sufficient if you drive your vehicle for work. You absolutely need commercial auto insurance as well.

• Inland marine insurance: If you transport tools and equipment for your job, you may want to consider inland marine insurance too. That way, if something happens to your commercial vehicle during a volcanic eruption, and your equipment and tools onboard end up damaged or lost as a result, they are covered as well.

Read through your insurance policies carefully, and make note of any other exceptions. You might need to purchase additional types of coverage, depending on your scenario and the specific exclusions you need to get around.

FAQ

To wrap up this guide, here are answers to some frequently asked questions about volcano insurance.

Q: Is there such a thing as volcano insurance?

A: Kind of… Damage from volcanoes is covered via other types of policies, such as commercial property insurance or homeowners insurance. You shop for these types of policies, not for “volcano insurance policies.”

Q: If you live close to a volcano, should you get volcano insurance?

A: Yes. If you live close to a volcano, you should definitely get volcano insurance. Just remember, it will not be marketed as “volcano insurance.” It will be a combination of features from your regular commercial property insurance and homeowners insurance plus whatever endorsements you add to cover the gaps from policy exclusions.

Q: Does travel insurance cover volcanic eruptions?

A: Yes, travel insurance does frequently cover volcanic eruptions. The caveat is that the eruption must be unforeseen at the time you buy the coverage. If the eruption is expected, and you travel to the location anyway, the insurance company is not going to pay out for volcano-related claims. That is on you.

Q: Does Hawaii have volcano insurance?

A: Insurance for volcanic destruction in Hawaii is largely similar to what is available elsewhere. Some policies may feature optional lava insurance add-ons.

If you are in a lava zone, you can try applying for insurance through the Hawaii Property Insurance Association (HPIA), but be aware that their premiums are high.