On March 22nd, a hillside that was saturated with water from earlier rains gave way. A wall of mud, trees, and debris swept over the North Fork of the Stillaguamish River and covered an unincorporated area known as Steelhead Haven located 4 miles east of Oso, Washington. Mud, trees, and other debris covered an area of Steelhead Haven measuring 1,500 feet long, 4,400 feet wide and between 30 and 40 feet deep, roughly 1 square mile.
49 homes were engulfed by the mudslide and as of April 17, the Snohomish County Medical Examiner confirmed there have been 39 deaths from the slide. 4 people are still missing. This event is the single deadliest landslide event in the United States, excluding landslides caused by volcanic eruption, earthquakes, and dam collapses.
Without making light of the enormity of loss the residents of Steelhead Haven experienced, I was curious if home insurance would cover the property loss the homeowners experienced from the mudslide. I asked several underwriters whether property losses from an event such as the Oso mudslide would be covered by home insurance. I also asked if there would be any difference in coverage had this been a rockslide or landslide.
The answers I received from the underwriters I talked with were very interesting and were either yes, it’s covered, or no it’s not. Here’s how each group views mudslides, and the one caveat they all agree on.
For those insurance companies that answer no, they made a distinction between a mudslide and a landslide. While these companies would cover damage from a landslide in most instance, they would not cover damage from a mudslide. The reason for not covering damage from a mudslide is they view a mudslide as a flood related peril. In order for property loss or damage to be covered, whether personal property (contents) or the home itself, the homeowner would need to purchase flood insurance. In a case like this, it’s important to note that flood insurance must be purchased for both the home and personal property in order for both to be covered.
For those insurance companies that do provide coverage for a mudslide or landslide, they tended to include this coverage under the category of falling objects which most carriers do cover. It’s important to note one important caveat though. If the mudslide or landslide were preceded by an earthquake, then any property damage or loss would be treated as an earthquake claim. In order for property damage or loss to be covered, the homeowner would have needed to purchase optional earthquake insurance as no homeowner’s policy covers damage from an earthquake.
In the case of the Oso mudslide, there was no seismic activity that preceded the mudslide, although the mudslide itself generated seismic activity. Since no seismic activity preceded the mudslide, property loss would be covered by any home insurance policy that did not exclude coverage for mudslides.
There are no areas in the Dallas / Fort Worth metroplex, I am aware of, where a homeowner would need to worry about a mudslide or landslide. Our friends in the Hill Country could potentially have an issue with this, however, I would encourage all of our friends in areas of New Mexico, Colorado, or California that live near hills where underbrush or trees burned in last year’s forest fires to check their home insurance policies now. It only takes a few minutes to review a policy or call your insurance agent to determine whether damage from a mudslide or landslide would be covered, and it would be better to know now rather than after a heavy rain. We only have to look back to last year and the damage Colorado Springs and Manitou Springs suffered from flooding and mudslides when the Waldo Canyon area received too much rain and damaged both towns.
Do you have a question, comment, or experience you’d like to share? You can do so in the comments section of our blog or on our Facebook and Google + pages. I’d love to hear from you!