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Yes, you can enclose your crawl space. Enclosing your crawl space can promote energy efficiency and reduce the risks of pests and mold by limiting factors like humidity. It can also reduce heat loss, which is why doing so for the winter can make your home more comfortable.

Below-ground shelters are the best in terms of durability, but there is a risk of flooding and obstruction. Modern technology and rigorous construction requirements make above-ground shelters a better option for accessibility, safety, and, usually, your budget. They may not have the same aesthetic appeal, but many of their features make above-ground shelters a better option. 

In most cases, standard homeowners insurance policies cover water damage from sudden, accidental damage, like burst pipes and leaking appliances. However, water damage caused by flooding, groundwater seepage, or heavy rain is likely to be excluded from coverage. Check your policy to be sure, as some plans include opt-in flood insurance coverage. Certain companies also allow homeowners to add an optional water backup endorsement to a policy.

In most cases, yes, because the large majority of basements leak or will have moisture issues at some point, and waterproofing methods can mitigate that risk or eliminate it entirely. Plus, water and moisture issues can be quite problematic, as they can lead to mold growth, rotting of building materials, structural damage, poor indoor air quality, increased electric bills, and other problems.