What Does Homeowners Insurance Cover for Military Families?

A military family gets PCS orders to a new duty station and finds a house they love. Maybe it is close to the installation, has enough bedrooms for the kids, and is under BAH. There is just one problem: The house is in a coastal or flood-prone area.

The family assumes their homeowners insurance will protect them if a major storm damages the house. That assumption could be expensive.

Military families can face additional complications because PCS moves often mean buying or renting homes in unfamiliar areas, sometimes near coastal installations or in communities where flood risk may not be obvious.

Before you assume your homeowners insurance covers everything you own, review the exclusions and coverage limits in your policy.

What Military Families Should Know About Homeowners Insurance

For military families, homeowners insurance deserves a closer look because a PCS can put you in unfamiliar insurance territory.

You might move from an inland installation to a coastal duty station, for example, and discover that the risks facing your new home are very different from those at your previous location. A home near a military installation may be exposed to hurricanes, storm surge, heavy rainfall or flooding even if the property itself has never flooded.

A PCS can also mean moving quickly. When you are trying to buy or rent a home, arrange schools, schedule movers and report to a new duty station, insurance details may become one more item on an already long checklist.

That makes it especially important to identify coverage gaps before you move in.
Military families should pay particular attention to:

• Flood insurance: Standard homeowners insurance generally does not cover flood damage.
• Coastal storm risk: Wind and flood are separate insurance issues, and a policy may treat them differently.
• High-value belongings: Military memorabilia, jewelry, electronics, collectibles and other valuables may have special limits.
• Firearms: Policies may impose specific limits or conditions on coverage for certain losses.
• Temporary moves: A PCS can make it more difficult to keep an inventory of belongings and documentation up to date.
• Replacement cost: Check whether your policy pays actual cash value or replacement cost for covered personal property.
• Renters insurance: Military families who rent rather than own still need to consider coverage for their personal belongings and liability.

The important point is that living near a military installation does not change the basic rules of homeowners insurance. Your policy still determines what is covered, what is excluded, and how much the insurer will pay.

And because military families frequently move, it is worth reviewing these details every time you move to a new home.

What Does Homeowners Insurance Typically Cover?

Homeowners insurance is an incredible tool. These policies can protect your home from Mother Nature and much more.

A typical homeowner’s insurance policy covers an exhaustive list of casualties, which may blind the homeowner to an equally important consideration – casualties that the policy doesn’t cover. They typically cover losses resulting from theft, fire damage, internal malfunctions (such as a burst water pipe), and a host of environmental causes, such as wind damage or tree limbs falling on your house.

Homeowners insurance policies provide limited coverage for unauthorized use of stolen credit cards or financial fraud expenses, though federal consumer protections and bank policies often already limit cardholder liability.

Policies will also be very specific as to the contents that will be covered, including the physical structure of a home, your home furnishings, appliances, carpet and drapes, and personal effects like computer equipment and jewelry.

When you see such a long list of covered casualties, it’s very easy to assume that the policy has everything imaginable covered. But that’s a wrong assumption. It is almost certain that your homeowners’ insurance policy does not cover two of the biggest threats – earthquakes and flooding.

What Homeowners Insurance DOESN’T Cover – Earthquakes, Floods, and Landslides

Here is a list of frequent losses that your basic homeowners insurance policy probably doesn’t cover—and what you should do about it:

Your homeowners’ insurance doesn’t cover flooding

Flood damage is one of the most common types of damage not covered under a typical plan. Almost no homeowners’ insurance policies cover flood damage.

Even if you don’t live in a high-risk area, there is always a chance your home and belongings could be damaged by flooding.

If you ever experience a flood, it could damage most of your belongings and require thousands and thousands of dollars in repairs. If you want to get protection from flood damage, you’ll need to get additional insurance.

People don’t know that flooding is not covered under their homeowners’ insurance policies often because they live in an area that has not experienced flooding in many years. If you have a mortgage and your property is located in a flood zone, the mortgage lender will require you to carry flood insurance for the term of the loan.

However, it is still possible that you might not have flood insurance if your mortgage is paid off or if the property is determined to be in a flood zone after you took out your mortgage.
It’s easy to see why you would avoid having flood insurance if you possibly could avoid it. Flood insurance can be expensive. The actual premium you will pay for coverage depends on your specific location within the flood zone and how frequent flooding is in your area (it is possible to be in a flood zone even if the neighborhood has not experienced flooding in decades).

FEMA’s “Risk Rating 2.0” pricing system, introduced nationally in 2021, changed how premiums are calculated and caused premiums to rise for some homeowners while decreasing for others.
On an annual basis, the cost can range from a few hundred to several thousand dollars. It will very likely be more expensive than your regular homeowners’ insurance policy – even though it covers only a single threat.

Additionally, standard homeowners’ insurance often does not cover sewer backup or sump pump overflow unless you purchase additional water backup coverage.

It doesn’t cover earthquakes either

Perhaps the biggest complication with earthquakes is the real potential for destroying your property. And since earthquakes can change the topography of an area, it’s even possible that your property will no longer be buildable in the aftermath of a particularly severe earthquake.

And once again, earthquakes are not covered by standard homeowners’ insurance policies. Unless you have a specific earthquake policy, you are not included. In some states, especially California, earthquake insurance may be available through state-backed programs such as the California Earthquake Authority.

Earthquake insurance can be even more expensive than flood insurance. Exactly how much the premiums are will depend upon how close you are to a known fault line, the activity of that fault line, and the history of earthquakes in the area. The structure of your home – more specifically, whether or not it is built to withstand an earthquake – will also affect your premium.

Landslides are generally not covered

If you live in an area that is prone to any of these issues, know that your homeowners’ insurance will generally not cover them.

Flood insurance is most commonly available through the National Flood Insurance Program, administered by FEMA, though a growing number of private insurers also now offer flood insurance policies in many states.

It is also possible to bridge your coverage with specific earthquake and landslide insurance if these are hazards in your area. Your best bet is to learn the geological risks before you buy a house—because the insurance companies certainly know what they are!

Other Damages Typically Not Covered by Homeowners Insurance

While there are many things these plans cover, there are dozens of different things they don’t. You must understand what’s not covered; those expenses could leave you with some massive bills.

Homeowners insurance comes with a great deal of fine print. Though most of us could think of many things we’d rather do than read our policy, it’s important to know what it covers BEFORE you need it. Sadly, these common problems that can eat away at your house are not often covered.

Termites, mold, and pests

Another common misconception about homeowners’ insurance concerns creepy-crawly bugs, such as termites, and other problems, such as mold growth. Those little termites can cause massive damage.

In the United States, termites cost homeowners over $6 billion every year in repairs.
This is because the destruction termites and mold can wreak does not occur suddenly. Instead, the damage occurs over a lengthy time frame. Insurance companies consider this a maintenance issue and, therefore, the homeowner’s responsibility.

If you have an issue with termites, mold, or other pests, you will have to call a professional to get rid of them. Keep that from happening by staying on top of your home maintenance.

Cars, boats, and other vehicles damaged or stolen on your property

While umbrella coverage may take care of the friend’s car you’re borrowing after a tree next to your driveway drops a branch through the windshield, you must have purchased that umbrella coverage ahead of time.

Don’t assume that your homeowners’ insurance is prepared to cover losses of visiting vehicles!
Talk to your insurance agent about how much umbrella insurance would be prudent for your situation.

Intentional damage

Insurance companies are suspicious of damage to homes being done on purpose.
If the damage is committed by a resident of the house, it is an apparent conflict, and there will be no coverage. Things can be a little tricky, even if the trickster is a non-resident.

Unfortunately, there is no way to protect yourself from this in advance, but it is good to know that your insurance company will not pay for it.

High-Value Items May Need Additional Coverage

You may be surprised to discover there are certain exclusions to the policy, including exclusions for certain damage (common for flood and wind damage), and sometimes exclusions for certain items you own.

These are usually limited to high-value items such as jewelry, artwork, memorabilia, collectibles, musical instruments, and electronics. If you own expensive belongings, check your policy’s limits and ask whether you need a scheduled personal property endorsement or another form of additional coverage.

Firearms

Some homeowners insurance policies provide coverage for firearms, but policies can impose special limits for certain types of losses, such as theft. If you own firearms, review your policy’s specific limits rather than assuming the standard personal-property coverage is sufficient.

Military families who move frequently should also make sure their insurance documentation reflects their current property and coverage needs.

The important insurance question is not simply, “Are firearms covered?” It is how much coverage applies, what types of losses are covered, and whether your policy requires additional coverage for higher-value items.

Military Memorabilia

Military families may accumulate memorabilia over years of service and PCS moves. That could include medals, uniforms, challenge coins, historical items, photographs, documents, collectibles, or other objects with significant personal or financial value.

Some of these items may be covered under standard personal-property coverage, but a policy can impose limits on certain categories of valuables. And sentimental value is not necessarily the same as the amount an insurer would pay for an item.

If you have particularly valuable military memorabilia or collectibles, ask your insurer whether the items need to be specifically scheduled or separately insured. Keep documentation that establishes ownership and value, especially for items that would be difficult to replace.

Determine Your Coverage Amounts

There are a couple of ways you can make sure you have enough insurance for your belongings.
Most insurance companies determine an “average coverage amount” based on your location, your home’s cost, the number of rooms, and other factors.

For example, an insurance company may cover the value of your home for $250,000 and the value of your belongings for $100,000.

The latter number is an estimate based on the size of the home, number of rooms, location, etc.
If your house and the contents were to be completely written off (think natural disaster or fire), then your insurance company would reimburse you for the amount of your home, plus the belongings, minus your deductible, of course. This is the easy way to make sure you have enough coverage.

If the total value of your belongings falls within the window set by the insurance company, then you are covered. But you will be surprised how often you do not have enough coverage.

If you need more coverage than your insurance company offers, then ask how much it would cost to increase your coverage. It is generally very affordable to raise your coverage levels. When reading through your policy, also double-check to see which high-value items are covered and which are not.

In addition, review whether your policy reimburses losses based on Actual Cash Value (depreciated value) or Replacement Cost Value, which pays the cost to replace items at current prices. Another item to research during this process is Mortgage Life Insurance. In the instance that the homeowner passes and leaves behind a mortgage, this will help the surviving spouse and/or children with the remaining mortgage cost.

Document Your Belongings

You don’t need to create an elaborate inventory before you can improve your insurance preparedness.

At minimum, photograph or record your most valuable belongings and keep receipts, appraisals, serial numbers, and other proof of ownership when available.

A complete home inventory can make the claims process easier after a major loss, particularly when you have moved frequently and accumulated belongings over multiple duty stations.

For military families, store the inventory somewhere you can access it during a PCS—not only on a computer or device that is inside your house. Cloud storage can make it easier to access your records if your home or belongings are damaged.

Add an Insurance Rider for Your Expensive Items

If your policy has a special limit that does not adequately protect an expensive item, you may be able to add an endorsement, often called a rider or scheduled personal property coverage.
This can be particularly useful for high-value jewelry, artwork, collectibles, musical instruments, electronics, and other belongings.

The exact cost and requirements vary by insurer. You may need an appraisal or other documentation establishing the item’s value. Don’t wait until after the item disappears to find out that your policy has a $1,000 limit on a category of property worth much more.

Know What Your Homeowners Insurance Does—and Doesn’t—Cover

This is an excellent time to point out an important fact about homeowners’ insurance policies – or any other type of insurance, for that matter. Unless a threat is mentioned explicitly as a covered risk in your policy, it will not be covered.

People usually look at their homeowners’ insurance policy once – when they first buy it. After that, it won’t be opened again – unless there’s a need to file a claim. If the claim you hope to file isn’t listed as a covered risk, you will most likely be out of luck.

That being the case, today is a perfect day to dust off your homeowners’ insurance policy and conduct a detailed review. You might even want to discuss it with a friend or relative in the insurance business to get their opinion.

In most cases, every insurance carrier will provide the basic coverage we listed above.
But every carrier will have different exclusions and limits on their protection. You should always take the time to review your policy and understand what your plan covers and what you could be paying for on your own.

If you review your policy and don’t like the coverage, you can always get supplemental protection or change policies.

Your home is your biggest investment; you want to guarantee it will always be there.

Military Homeowners Coverage FAQs

Does homeowners insurance cover flood damage at a military duty station?

Generally, no. Standard homeowners insurance typically does not cover flood damage, even if your home has never flooded before. This can be especially important for military families moving to coastal or flood-prone duty stations, where storm surge, heavy rainfall, or other flooding may pose a risk.

If you’re buying a home near a military installation, ask your insurer whether you need separate flood insurance and get a quote for the specific property.

Do military families need flood insurance if their home has never flooded?

Potentially. A home’s history of flooding does not necessarily reflect its current or future flood risk. A property can be vulnerable to storm surge, heavy rainfall, or other sources of flooding even if it has never flooded before.

Military families should consider flood risk when moving to a new duty station, particularly in coastal areas. If you’re unsure about a property’s risk, ask your insurance agent about flood coverage before purchasing the home.

Does homeowners insurance cover military memorabilia?

Military memorabilia may be covered under your personal-property coverage, but policies can impose limits on certain categories of valuable property. Medals, uniforms, challenge coins, historical items, collectibles and other memorabilia may also have significant sentimental value that is difficult to replace.

If you own particularly valuable military memorabilia, ask your insurer whether it needs to be specifically scheduled or separately insured. Keep documentation that establishes ownership and value.

Does homeowners insurance cover firearms?

Some homeowners insurance policies cover firearms, but they may impose specific limits, particularly for losses such as theft. The amount of coverage can vary by policy.

If you own firearms, review your policy’s limits and exclusions rather than assuming your standard personal-property coverage is sufficient. If the value of your firearms exceeds the policy’s limits, ask your insurer whether additional coverage is available.

Do military families need renters insurance?

Yes. Homeowners insurance protects the owner of a home, while renters insurance can protect a tenant’s personal belongings and provide liability coverage, depending on the policy.

Renters insurance can be particularly important for military families because a PCS may mean renting homes at multiple duty stations. Don’t assume your landlord’s insurance will replace your belongings if they are damaged or stolen.

Does BAH cover homeowners insurance?

BAH is intended to help eligible servicemembers cover housing costs, but it is not an insurance benefit and does not specifically reimburse homeowners insurance premiums.

When comparing homes at a new duty station, be sure to factor in the total cost of homeownership including the mortgage, property taxes, homeowners insurance, flood insurance if needed, utilities, and maintenance.

Sources

FEMA: https://www.fema.gov/flood-insurance/risk-rating
California Earthquake Authority: https://www.earthquakeauthority.com/
National Flood Insurance Program: https://www.fema.gov/flood-insurance