Insurance Can Help Reduce Effect of a Disaster
Even though you may be adequately prepared for a disaster, you may still suffer significant damage to your property. This is why renters or homeowners insurance is so important. Yet many people affected by disasters have been under insured, or not insured at all. Make sure the insurance you buy protects against the hazards you may face.
Homeowners
- At minimum, buy full replacement or replacement cost coverage. This means the structure can be replaced up to the limits specified in the policy.
- Investigate buying a guaranteed replacement cost policy. When and where available, these policies can pay to rebuild your house, including improvements, at today's prices, regardless of the limits of the policy.
- Periodically, have your home reappraised to be sure the policy reflects the real replacement cost.
- Update your policy to include any home improvements. Annual automatic increases may not be enough to cover these.
- Buy a policy that covers the replacement cost of your possessions. Standard coverage only pays for the actual cash value (replacement cost discounted for age or use).
- Be very clear about what the policy will and will not cover, and how the deductibles work (the part you pay before the policy pays).
- Check state-operated or federally operated insurance pools if you find it difficult to obtain private coverage because of a recent disaster. Premiums often run higher than market rates, but is better than no coverage.
- Conduct a home inventory, make a list, and use it to check that you policy's coverage matches the value of your possessions.
Renters
- Buy renter's insurance, which pays for damaged, destroyed, or stolen personal property. Your landlord's insurance won't cover damage to or loss of your possessions. Also, consider special coverage such as flood insurance for your belongings.
- Be very clear about what a policy will cover. Some policies cover more than others.
- Comparison shop for the best coverage at the best price. Policies vary from company to company. Policies in most areas are affordable. Start with the company that insures your car, discounts are often available if you carry more than one policy with a company.
- You may also want to consider special coverage, as insurance for renters, and homeowners, won't cover certain types of losses. Ask your agent about special or additional coverage for floods, earthquakes, home offices and other potential problems.
