Hurricane, Flood or Disaster Insurance

Do you have insurance on your home? Most of us likely do, especially if we still have a mortgage. Any lender that doesn't require you to have insurance on your most critical asset won't be in business for long.

But do you have enough insurance? Your lender only cares about insurance on the structure itself. Do you have enough on your contents? Are you ready in case of severe weather or other disaster? The hurricane season of last year (and this year's crop of tornadoes) are again showing us that insurance on our homes is a must. And it's got to be the right insurance -- otherwise, you could be one of the horror stories.

For instance, there are folks in the Louisiana area who won't get their insurance claims paid because they had hurricane coverage but not flood insurance. Crazy, but true. If the home wasn't destroyed by the hurricane directly, but destroyed by the flood waters when the levies broke, people with hurricane insurance aren't covered! You have to have all the right coverages for your area, or you could have damage done to your home by a cause that isn't covered. (Read the fine print on your policy: you could be surprised.)

The same goes for other combinations of damage. If you have flood and water damage coverage, but your home is actually damaged by a mudslide (caused by the flood waters, I know), you won't get a dime. If you've got coverage for water damage alone, your insurer won't give you the time of day if a flood happens. And so on.

What kinds of problems could you face with your home? Severe weather? Earthquake? If you aren't sure what kinds of coverage to have, consider talking to your state's Department of Insurance or Insurance Commissioner. The National Flood Insurance Program (NFIP), which operates under FEMA, can give you information on flood zones in your area as well. They can also give you insurance -- if you aren't happy with the kinds of coverage that your private insurer is offering.

Don't get stuck with a mortgage to pay and no house to show for it.

Michael

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