Natural Disasters and Your Home
Regardless of the season or where you live, natural disasters can affect anyone. Whether it's a flood, a blizzard, or an earthquake, those of us who are most prepared (and watch the weather report continually) can nevertheless have our lives turned upside down by such a tragedy. But, with a little bit of planning, insurance shopping, and postdisaster help, you should be able to get back on your feet even if Mother Nature strikes your community.
A good insurance policy can be a vital tool when it comes to rebuilding after a natural disaster. In the insurance world, natural disasters are treated differently given the varying consequences that can flow from a flood as opposed to an earthquake. Typically, differing levels of insurance coverage are available for the following types of disasters:
Floods. Flooding can arise from many sources – rivers, lakes, oceans, and so on. Homeowner's policies absolutely exclude damage from flooding except in a narrow range of cases, such as a burst pipe or water tank. Generally, you can't get an endorsement to cover flood damage; however, if your community is flood-prone, you can probably buy a special policy as part of the National Flood Insurance Program, which is administered by private insurers and backed by the federal government. Any insurance agent can sell flood policies. The cost depends on what measures your community has taken to reduce the risk of flood damage. Until your community meets the standards of the federal flood-control program, only limited coverage is available.
Earthquakes. The state of California requires insurance carriers to offer earthquake coverage to anyone in the state who carries a homeowner's policy. Usually such coverage takes the form of an endorsement to the regular policy, expanding the coverage for a fee. But if a California policyholder decides not to buy or renew the endorsement, the carrier isn't obligated to give him or her a second chance. Of course, given the risk, earthquake endorsements in that part of the country don't come cheap. If you live outside of California and are interested in earthquake insurance, you will need to purchase additional coverage from your provider.
Tornadoes and hurricanes. Although standard homeowner's policies cover windstorms, you may need extra protection if you live in an area that is especially prone to tornadoes or hurricanes. In these areas, standard coverage may not be available; you may have to buy a special policy, such as the beach and windstorm insurance plans available in Atlantic and Gulf Coast states. As with flood insurance, any licensed agent or broker in those states can sell this type of insurance.
Volcanoes. Volcanoes are specifically listed as a covered peril in standard homeowner's policies.
The insurance claims process is fairly basic, but it will go more smoothly if you have taken an inventory of your possessions and their value ahead of time. After the disaster (and, of course, only once it is safe), call your insurance agent or insurance company immediately. Ask whether you are covered for the situation, whether the claim exceeds your deductible, how long it will take to process the claim, and whether you will need estimates for repairs. Follow up your call with a written explanation of what happened. If you need to make temporary repairs to secure your home or protect it from the elements, keep track of expenses – but don't make permanent repairs until an adjuster has inspected the damage.
A special warning: don't do business with someone who comes to your door after a loss claiming to be an adjuster. Scam artists may be eager to take advantage of your misfortune.
In many unfortunate situations, insurance coverage won't be enough to cover your damage, or the events may be outside of your insurance policies. In such cases, the federal government may be able to help you out. The Federal Emergency Management Agency (FEMA) is the primary government agency that responds to natural disasters nationwide. FEMA can provide disaster assistance to families, individuals, and businesses whose property has been damaged. However, as FEMA spells out on its website, such assistance is meant to help with critical expenses and is not intended to "restore your property to its condition before the disaster."
The FEMA website (www.fema.gov) provides information on who qualifies for disaster assistance and the application steps. You will need certain documentation during the application process such as any insurance information, your Social Security number, total household income, and routing number for your bank. For this, and a number of other reasons, it is beneficial to keep such information in a safe and secure location such as a bank deposit box or a waterproof portable container.