John Florschutz was surprised to learn that his parents’ homeowner’s insurance policy did not cover the loss from the Nov. 20 landslide that destroyed their home and killed his father, Otto Florschutz.
“I think it’s a shock to everyone I talk to,” he said last week. “What’s the point of home insurance. … You would expect flooding to be on the policy.”
But floods, landslides, mudslides and other “earth movements” are not covered by standard home insurance policies.
“There’s not a lot of people who know that,” commented Florschutz, who said he has talked about it with family and his co-workers at the U.S. Coast Guard base in Kodiak.
His parents had been paying for insurance for more than 30 years without realizing that landslides were not part of the policy, he said.
John Florschutz questioned whether other homeowners, including the more than 70 people who live past the landslide area at 11-Mile Zimovia Highway, are aware of the limitation of their insurance policy.
“Flood insurance is not included in your homeowner’s policy. It is sold as a separate policy. Coverage may include direct physical losses caused by a flood, flood-related erosion, abnormal tidal surges and mudslides,” the Alaska Division of Insurance advises on its website.
“A landslide is considered an ‘earth movement’ event … like an earthquake, it is excluded from standard homeowners and business insurance policies,” according to the website of the Insurance Information Institute, a member organization of dozens of insurance companies.
Homeowners can buy separate policies for landslides or earthquakes, but they are expensive.
John Florschutz said his mom, Christina, who was injured in the slide, is staying with friends and has returned to work with Wrangell schools, though her future plans are uncertain. “We don’t really know where we’re going,” her son said of permanent housing plans.
The family had hoped that an insurance payment “would have set my mom up to start over and start new.” Though building or buying a home could be an option, “she doesn’t have that (financial) ability to do that right now,” her son said.
The Florschutzes did not owe a mortgage on the home that was destroyed in the landslide that also took out a nearby home, killing Timothy and Beth Heller and their three children.
State disaster response funds are available to repair damage to housing, and to cover other expenses directly related to the landslide. Those payments, however, are limited to no more than $21,250 for housing repairs, and an additional $21,250 for other assistance, such as to replace personal items, pay for transportation or medical bills.
In addition, the state Temporary Housing Program provides up to 18 months of rental assistance for homeowners who are unable to return to their house. The program does not cover uninsured property losses.
Though appreciative of the temporary assistance, “it doesn’t even begin to cover the cost” of a new home, John Florschutz said.
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