The policy usually includes not only earthquake damage, but also damage arising from flooding. In this case it is advisable to read the conditions to understand if these events are included in the definition of the insured risk.
What does the Natural Calamity Policy cover?
Let’s try to understand in principle what damages are reimbursable by a Natural Calamity Policy.
Generally, the insurance covers material and direct damage (including Fire and Explosion) suffered by the building and/or its contents (if insured) due to :
Earthquake (as defined above also in the seismic sequence);
Formation of streams following exceptional atmospheric precipitation;
Water leakage from natural or artificial basins (even if caused by an Earthquake or by a landslide);
These events must manifest themselves in a devastating manner on a plurality of things located in the vicinity.
What doesn’t the Natural Catastrophe Policy cover?
Let’s also take a look at the exclusions because they can be important…
Generally, damages are excluded:
caused by a seaquake or tsunami (even if caused by Flood, Flooding or Earthquake);
caused by a volcanic eruption;
caused by transmutation of the nucleus of the atom or radiation (even if originating from Flood, Flooding or Earthquake);
caused by war, revolution, terrorism, sabotage (Socio-Political Events);
caused by looting;
indirect (lack of enjoyment of rental income, suspension of work, and in general those that do not materially concern the building or insured property but which indirectly are a consequence of the Flood, Flood or Earthquake);
to underground rooms (this is usually only in the event of a Flood or Earthquake);
to buildings that did not comply with the earthquake regulations in force at the date of construction;
Beware in particular of looting (a recurring phenomenon after insured events) and above all of Earthquake Regulations.
This last exclusion can cause us to pay a premium unnecessarily. We know that most of the houses in our country are not built according to anti-seismic criteria and therefore it is preferable to stipulate policies which clearly distinguish the types of construction: for example, a masonry building or an anti-seismic building.
In this way we will rather pay a higher premium, but we will be sure of the operativity of the guarantee in case of Earthquake.
Usually the Insurance Companies classify as anti-seismic the building which conforms to the principles defined in the Ministerial Ordinance n. 3274 of 20/03/2003 or in the Decree “Approval of the new technical norms for constructions” of 14/01/2008.
Before stipulating the Policy, it is therefore essential to ascertain this conformity as it is an essential condition for the guarantee to be rendered operative.
Let us now speak of Excesses, Deductibles and Limits of Indemnity…
This is the most “painful” note if we compare the various products on the market today.
The Deductibles (or Excesses) in case of Flood, Flood or Earthquake can be very high and are usually around € 20,000.00 (or 20% of the damage for the Excess).
Furthermore, the entire reconstruction value of the building can never be reimbursed, but at most a percentage of the same that goes from 30% to 70% (this happens above all in the Earthquake Appendices to the Home Insurance, in fact it is better to stipulate a separate Policy for these events).
There are very few cases in which derisory deductibles are foreseen (to exclude small damages) or higher indemnity limits or with the prevision of a ceiling dedicated to the Natural Calamity cover and separate from that foreseen for Fire.
By virtue of what we have seen, it is therefore essential to compare, especially in this case, the different offers on the market.