Insurers treat damage from mudflows, landslides differently

Homeowners can be covered for damage caused by a mudflow if they have a flood-insurance policy, but that’s not the case if the losses are the result of a landslide or mudslide.

Q.I know that most types of damage caused by hurricanes and other “high winds” are covered by a standard homeowners insurance policy. But what about mudslides, like the ones that recently wiped out so many homes in Southern California?

A. For better or worse (mostly worse), home insurers separate damage caused by Mother Nature in the wake of a major storm or flood into two distinct categories.

The first is “mudflow,” with its damages covered if the homeowner has purchased a separate flood-insurance policy.

The second is “landslide,” which is not covered by either a standard homeowners policy or a supplemental flood-insurance plan.

The key difference is that a mudflow, typically created after an unusually heavy storm, loosens nearby dirt, then swamps the home or yard.

Damages created by the mudflow would be covered — but only if the homeowners had supplemented their regular homeowners policy with a flood-insurance plan backed by the government’s National Flood Insurance Program (www.fema.gov) or one of the handful of private insurance providers.

A landslide, sometimes called a mudslide, occurs when a mass of earth or rock tumbles downhill. Insurers consider a landslide an “earth movement” event, so, like earthquakes, it isn’t covered by a standard homeowners policy. And because landslides typically don’t involve enough liquid to seep into a home, a representative for the nonprofit Insurance Information Institute (www.iii.org) says, damage that it may cause usually isn’t covered by a flood-insurance policy either.

It’s worth noting that some companies offer a “Differences in Conditions” policy that provides all-in-one coverage for damages caused by landslides, mudflows, floods and even earthquakes. They are expensive and often require high deductibles, but they can help you sleep better at night if you can afford such a policy.

One final note: If you pay extra for the optional comprehensive insurance protection on your automobile policy, damage caused to the vehicle by a landslide, mudflow, quake or flood will be covered.

Q. We live in a neighborhood where most homes have 1,800 square feet of space or more, which is pretty large by our city’s standards.

Sales here are still strong, but most of them recently involved buyers who are in their 60s, 70s or even their 80s. Isn’t that unusual?

Most of the older buyers I have known in the past wanted to “trade down” into much smaller properties, partly because their children had grown up and left to start families of their own.

Q. True, the vast majority of senior buyers in the past opted to move into much smaller properties than the one that they had sold, but a variety of factors are beginning to change that long tradition.

A comprehensive survey of retirees by financial services giant Merrill Lynch and Age Wave, a consulting firm that specializes in aging issues, found that a surprising 30 percent of them chose to buy a house that was larger than the one they had just sold. The remainder purchased property that was equal in size or a bit smaller.

The senior buyers who chose to upsize cited several reasons for their decisions. With many Americans working later in life, some wanted extra space for a dedicated home office. Others needed more room to pursue their hobbies or to entertain friends.

Still others, anxious to stay physically fit as they grow older, needed a special area for their treadmill or other exercise equipment.

Many older buyers who decide to buy a bigger home still have their adult offspring in mind. It’s no secret that a countless number of grown children are staying in their parents’ home longer before moving into a place of their own or are moving back later to save money after graduating from college, losing a job or changing their marital status. A larger home can accommodate such changing needs.

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