Protect your home from nature’s wrath
Many homeowners have misconceptions about what their home insurance policy will cover, leaving them with unexpected expenses when disaster strikes.
If you’re at risk of floods, earthquakes or any other natural disaster, here’s what you need to know to make sure you’re covered.
Floods and hurricanes
Certain kinds of water damage are covered by standard homeowners insurance. For example, if your water heater springs a leak or a water pipe inside your house bursts, your home insurance will probably cover the damages after you meet your deductible.
But if it’s any other type of water event, such as flooding from heavy rainfall or a hurricane, you’re on the hook for the costs to repair the damages.
Homeowners can purchase flood insurance from the federal government or a private insurer. The government’s National
Flood Insurance Program provides up to $250,000 of dwelling coverage and up to $100,000 of contents coverage. The policy has two separate deductibles (one for dwelling, one for contents) that you must pay before coverage kicks in. Deductibles start at $1,000 but can go as high as $10,000 for single-family homes.
If you think this coverage is too low, you can try the private insurance route, which typically has higher coverage limits and will reimburse you for the full replacement cost of your home’s contents.
The cost of an NFIP policy varies, depending on risk, but averages about $700 a year. A policy from a private insurer averages $1,050 a year, according to Policygenius, an insurance comparison website. Premiums will vary depending on where you live. An insurance agent can help you compare options. Search for one near you at www.trustedchoice.com.
If you live in a hurricane-prone area, floodwaters aren’t your only concern. While damages from wind and winddriven rain are covered by a standard homeowners policy, many charge separate wind deductibles, which means higher out-of-pocket costs for you.
The deductibles are usually based on a percentage of your coverage rather than a flat dollar amount.
Wildfires and earthquakes
Wildfires have become increasingly common across California and some other Western states, bringing with them a slew of insurance woes. Wildfires are covered by standard homeowners insurance, but insurers have been canceling policies in some high-risk areas.
To protect homeowners during the 2020 fire season, California’s insurance commissioner issued a one-year moratorium on policy cancellations for policyholders affected by wildfires. So while they’re covered through 2021, California residents living in brushfire areas need to prepare for some higher costs when it comes time to renew their policies.
For example, a policy that may have cost $1,000 a year ago could cost three to six times that much at renewal.
Earthquake damage is always excluded from standard homeowners insurance policies. You need a separate policy or an endorsement on your current policy to cover direct damages caused by an earthquake.