Disaster Insurance

You could be faced with financially ruins if you needed but didn’t have disaster insurance.Having Disaster Insurance Coverage to soften the effects of a loss is not only a smart decision but is also a requirement by lending institutions like Banks and Credit Union. Insurance providers form the backbone of modern civilization. You wouldn’t be able to get a mortgage to buy a house or a car or in some cases a business loan without insurance.Homeowner Insurance:Your homeowners Insurance will cover a multitude of things that can happen to your home including fire, burglary etc. Both the structure and contents are covered. Since there are as many if not more losses for which you also will not have coverage it is important to take the time to read your policy and understand what is excluded.Renters Insurance:I am willing to bet you that if you ask the people you know who are renting if they have Renters Insurance, most of them will answer that they don’t.Renters insurance is probably the “best buy for the buck” as far as insurance is concerned. For an annual payment that’s probably less than a weeks’ salary most renters can buy renters Insurance and enjoy the peace of mind knowing that their furniture, clothes and other personal effects are covered.Let me encourage you wholeheartedly to buy some renters insurance and if you are a homeowner renting out a part of your house you should encourage your tenant to buy renters insurance.Find out from your attorney if you can insist on renters insurance as a condition of leasing or renting out your house or apartment. It’s that important.Flood Insurance for Homeowners:Floods are caused from rising water and should not be confused with water damage caused by roof leaks or wind driven rain. Remember also that the President does not have to declare a disaster for you to claim payment from your flood policy.Floods are not covered by your homeowners’ policy and so if you want flood coverage you will have to purchase a flood insurance policy.When you are shopping for a house it’s a good idea to do some research on the area in which you plan to buy your house to see if it is in a flood zone.Though you do not have to be in a flood zone to buy flood insurance, the cost will be much higher if you are in a floodplain otherwise called “Flood Hazard Area” (SFHA).Your Insurance agent can check the flood map to see if your area is in a high risk, medium risk or low risk area.The maximum amount of coverage that you can buy for your house of $250,000 and contents of $100,000. This will be different if it’s a two family house. Will this be enough to rebuild your house if it got swept away in a flood? Take this in account as you shop for your dream home.Flood Insurance for Renters:Just as renters insurance will provide peace of mind for you and your family you should be aware that it does not cover floods and your landlords’ flood policy will not cover your stuff either.Take my advice and also purchase flood insurance, its inexpensive and will be one of your best buys. The maximum you will be able to purchase is $100,000 and will afford you peace of mind knowing that there will be financial help for you if you had a loss…Hurricanes Disaster Insurance:Most Insurance companies if not all will include a very large deductible into your homeowners’ policy for hurricane damages. This is usually a percentage of the amount of your insurance coverage on your house and ranges from 3% to 7%.Here is an example: Let’s say your house is insured for $200,000. Your deductible is 5% ($10,000), Hurricane damages to your house is $50,000. You will only be paid $40,000.Are you able to come up with a deductible of $10,000 to repair your house if it was damaged? What if the damages were less than your deductible? You would not be paid anything by your Insurance Company. Your disaster insurance emergency fund should be an amount at least equal to your deductible but certainly recommended to be more.Earthquake Insurance:Are you living in an area that’s known to have earthquakes? If so then your disaster insurance plans should include Earthquake Insurance. Be aware that your Homeowners Policy will not cover you for an earthquake.Many Insurance companies offer special “Earthquake Insurance” and though coverage is not mandatory unless required by your mortgage holder, the deductible can go as high as 15% and sometimes more. This is important to know when shopping for a house as you put your house maintenance budget together.Tornado Insurance:This is the most devastating of all natural disasters. Tornadoes can rip through a neighborhood like a shredder leaving nothing but unrecognizable rubble behind. Unfortunately there is no “Tornado Insurance” available. You will have to depend on your homeowners insurance to cover you.I have spent some time on flood, hurricane and earthquake Insurance because they are the most common natural disasters. However this is by no means meant to ignore the other many natural disasters to which you might be exposed if you are living in such areas.Speak to your Insurance company or agent about the extent to which you are covered and if there is a mandatory deductible that’s being applied to a claim if there was damage to your house.Having spent some time in as an insurance agent and also as a real estate agent I would caution my clients on the importance of adequate insurance. As a real estate agent I would remind them as much as I am reminding you that before you buy “Think about how easy or difficult it would be to sell your house if it’s in an area known for a special kind of disaster.”Having the right equipment at hand also will go a long way in your preparations

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