Obtaining insurance for natural disasters can sometimes be confusing for the first-time homeowner. That word, “insurance,” implies built-in safeguards. But events like hurricanes, flooding, and earthquakes, are often excluded from standard homeowners’ policies.
What’s worse, some homeowners may not realize it until it’s too late. In this article, we provide some quick tips for how to ensure that your home is protected no matter what.
Understand What You Are Buying
As you look into natural disaster insurance, it’s important to understand what you’re buying. Many homeowners make one of two mistakes.
They either assume they’re covered for something they’re not, or they buy redundant coverage. It’s important to understand what you’re about to purchase so you don’t end up paying more for something you don’t need or paying out-of-pocket for something you thought covered.
Follow Patterns
Certain areas are more susceptible to specific types of natural disasters. For example, you probably won’t need specialized types of home insurance to protect against earthquakes or hurricanes if you’re living in Arkansas.
Examine the location-specific natural disasters that most homeowners’ policies fail to cover. Then, be mindful of when those specific events are set to occur.
Don’t spend too long weighing your options, though. While hurricane season typically comes with forewarning, earthquakes or flooding could happen at any moment.
Be Clear On Your Policy
Home insurance for natural disasters like some of the ones we’ve already mentioned is not built into the typical policy. You usually have to purchase flood insurance from FEMA, for example.
Read every word of your policy until you understand it. If the legalese is too much, schedule some time to speak with your agent or an attorney.
Come equipped with questions targeting specific types of natural disasters. Whatever isn’t covered by your existing policy, explore any riders that are available, and shop around for the best price.
Calculate What You Will Need
Home insurance coverage is more than what your home is worth. It also entails the full replacement value of your home if you needed to rebuild it from scratch under current market conditions.
We’re all aware of the quick lumber price spike that occurred during the pandemic. Had you needed to rebuild at that point, the cost of your home wouldn’t have covered it.
That’s why it is important to revisit your policies each year. Make sure the coverage is in line with current market conditions. Using a flood insurance calculator, or another related asset can help you determine how much you’ll need for damages on those specific policy types.
Hold Your End
The last thing to remember is that simply having insurance doesn’t absolve you of any upkeep or responsibility. Flood insurance might not cover, for example, if it’s determined that your home had mold buildup prior to the flooding event.
Figure out how often you need to repair or replace key assets. Then, make a service schedule and stick to it!
Insurance for Natural Disasters Requires Vigilance
Purchasing insurance for natural disasters is highly recommended if you live in a flood plain or in areas that have been historically susceptible to earthquakes, wildfires, hurricanes, and other natural disasters. Don’t leave it to chance! For more answers to your insurance questions, check out some of our additional posts!
