If the authorities think it can be life threatening, and if anyone decides to stay, the authorities have them sign a paper (like a will for next of kin), and this will release the state of any liability.
The person has been notified that if they stay, they do so at their own risk.
If their home is torn up, and by signing this document, I'm not sure how much insurance will be paid out for the destroyed home and/or life if any.
I would think it would have little impact if any on home insurance. It might however have an impact of the person's life insurance!