Insuring Your Home Against Flood, Wind, and Hurricane

Well, first we had Katrina. Then Rita. The US gulf coast has seen more water than most of us can imagine. Now the remnants of Tropical Depression Tammy are submerging the northeast. And all this severe weather and storm devastation has me thinking about insurance.

Do you have enough insurance on your home? Most "basic" homeowner policies are insufficient, unless you live in a relatively tranquil area of the world, and rarely if ever encounter flood, wind, droughts that feed fire, or other nasty weather-related phenomena.

Your basic homeowner policy will cover you for the absolute basics. In many cases, extreme damage could be partially if not completely uncovered. The only way to be sure is to read the fine print on your homeowners' policy. And unfortunately, if you are doing that after flood, hurricane or wind damage, it's likely too late.

You should review your homeowners coverage at least once a year. Make sure your policy really covers the true value of your home. Consider whether you want to up your coverage overall, or whether you need some special "endorsements" or "riders" on your policy for treasured expensive items, like your wedding rings or family heirlooms. In most cases, an insurance policy will have a cap on how much you can claim for jewelry and other valuables.

Are you in a flood-prone area? Do you have "hurricane" coverage? Are you sitting in drought-prone California without natural disaster coverage or coverage for "wildfire"? While some of these kinds of coverage can be very expensive, they can also save you the heartache of wondering where the money will come from to rebuild. You may be able to get money from FEMA, but that could be months in the getting. You should do what you can to protect yourself; insurance with a good and reputable company is part of that.

Do check out your insurance company. "Good and reputable" is not guaranteed. I've heard a few horror stories coming out of the gulf coast already, where insurance companies are doing everything they can to deny claims. Was it really flood that damaged your home, or was it still a "hurricane" as it passed overhead? These kinds of loopholes will be employed if your insurance company can't afford the claim burden of its policies. Pick a company stable enough to be able to afford your claim when the time comes.

May the weather be good where you are.

Michael

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