In a perfect world, earthquakes and floods would be rare—but as we've seen in recent natural disasters, the consequences can be devastating. If your home was lost in a natural disaster, could you afford to pay out of pocket to repair the damage, and would your homeowner's insurance policy offer enough coverage? Would you be able to rely on government help?
Standard homeowner's insurance policies don't ordinarily cover damages caused by earthquakes and floods. The Federal government offers assistance in the form of grants and loans, but the help is only available if there's widespread damage and if FEMA declares the area a complete disaster. To make sure you're adequately protected, you and your agent should review your current policy—and if you don't have flood or earthquake coverage, you should consider getting it after answering the following questions:
You should consider buying flood insurance even if you don't live in a flood plain. Storms, poor drainage, snowmelt, and hurricanes can all cause severe flooding. According to the NFIP (National Flood Insurance Program), about all 20% of all insurance claims come from low- to moderate-risk areas. If you're buying a home in a flood plain, your lender will require you to buy flood insurance before giving you a home loan.
Unfortunately, you can't just add flood insurance to your homeowner's policy. However, if you meet the eligibility requirements, you can buy separate coverage through an NFIP-affiliated company. Excess coverage pays damages above the limit, and it may even pay the entire replacement cost of your home. However, flood insurance does not cover sump pump failures and sewer backups.
Most homeowner's insurance policies have little coverage for earthquake damages; they exclude losses related to earth movements, but they pay for losses related to subsequent explosions, fires, theft and damage. If you live in an earthquake-prone area, you should consider buying this coverage. Your decision should depend on:
If you purchase earthquake coverage, you should buy at least enough to pay to rebuild your home and replace your belongings. Some damage isn't apparent right after an earthquake; therefore, you should be sure that your policy gives you sufficient time to observe damage and file the claim.
For more information, contact a company like Matt Roenker Insurance Agency.Share
21 July 2015