Homeowner’s vs Disaster Insurance

In the wake of the devastating Hurricane Ida in the New Orleans area, it brings to mind what role homeowner’s insurance does in protecting your home and the things in it. With any luck, you won’t actually need it, but it does provide a safety net in the worst case scenarios. Do you know that there are things that can happen to your home that aren’t covered by your homeowner’s insurance?

If your home is damaged by a natural disaster, such as a flood, earthquake, or tornado, you may find that your current insurance policy doesn’t cover these natural events. In certain cases, even man-made disasters may not be covered such as damage from an explosion or a riot. Regardless of the cause, damages from disasters can be very expensive. To protect against these high costs, you typically have the option to purchase additional disaster insurance to cover above and beyond what your typical homeowner’s insurance would cover.

The Limits of Homeowner’s Coverage

Many homeowners believe that their existing policies cover everything that could happen to their home, and unfortunately find out at the worst possible time that they aren’t actually covered. This is usually the result of a rare occurrence of flood damage, earthquake or wildfire. Even insurance policies that claim to cover “all” damage typically make these exclusions, since these damages aren’t localized to one property or home.

If you aren’t sure what coverage your policy currently offers, take a moment to find and review your policy or contact your insurance agent. Within your policy, you should find specifics about your coverage as well as any exceptions. If you want protection from these instances, you’ll want to add additional coverage.

How Disaster Coverage Works

Depending on your insurance provider and the type of coverage you want to get, there are a few options for you. You can buy blanket coverage that will cover multiple disaster types even though it may have a few exceptions built in. If this isn’t available or you want coverage for a specific disaster type, you may be able to buy single disaster policies that only cover individual disaster types. Depending on the insurer and availability your coverage may be available as separate policies or simply as an add-on to your current policy.

Once you’ve taken out your coverage, it will function similar to your existing insurance. Should a disaster occur, your claim should be filed to your disaster policy or any add-ons you’ve purchased instead of your standard homeowner’s policy. Depending on the type of disaster and damage that has occurred, there could also be claims against your health insurance, vehicle insurance or other insurance types; disaster insurance doesn’t supersede or replace any applicable insurance, it just help to close the gaps that were previously uncovered.

Do You Need Disaster Insurance?

Whether you want to pay the additional cost of disaster insurance is a matter of personal preference. By their nature, most disasters are pretty rare, though some areas are more prone than others. The more likely you could end up in a disaster, the more beneficial this insurance would be, but keep in mind, disasters don’t discriminate and can hit anywhere at anytime. Also be aware that if you are in an area where occasional disasters occur (such as a flood plain with a track record of flooding during certain seasons) you may not be able to get some types of insurance or your premiums may be higher.

If you are interested in looking into disaster insurance or a different policy, please reach out. We would be happy to connect you with one of our trusted Insurance advisors.

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