Many individuals were affected by “Superstorm” Sandy. Over the next days, weeks, and months, they will be picking of the pieces from this devastating destruction and making their homes and lives whole again. In the midst of a tragedy like this, we are reminded that we, too, could be the victim of the catastrophic “whims” of Mother Nature. Here are some tips to consider in order to adequately protect you and your property from loss.
Many people were affected by rising water and were not in high risk zones. How do you know if you need flood insurance?
- If you have a mortgage on your home, your lender will require you to have flood insurance if you are in a high risk zone.
- If you do not have a mortgage or are concerned about your risk, ask your insurance agent to run an assessment for you. He or she will determine what the risk is for your specific location.
- Inexpensive government subsidized flood insurance of up to $250,000 can be obtained through FEMA see http://www.floodsmart.gov/floodsmart/.
What protection does your homeowner’s policy provide?
- According to Scott Moseley from Irmo Insurance, “damage caused by surging storm water generally isn’t covered by your homeowner’s or renter’s insurance policy. Damage from wind, however, is generally covered by homeowner’s insurance policies”. So check you policy to see what your deductibles and total coverage are for a named storm. Look into flood insurance if you are in an area at risk for flooding.
What can you do now to protect yourself in the future?
- Review your coverage at least every three years with your insurance agent to make sure it will cover the full replacement cost of your home and personal belongings. Make sure you understand exactly what coverage you have and what you are covered for. For example, earthquakes are not covered under standard policies, so you may want to consider a separate rider.
- Have enough money in emergency cash reserves to cover your deductibles. Note that your deductibles may vary based on the type of claim. For example, earthquake damage or wind damage due to a “named” storm may have a higher deductible than your basic coverage. If your home is worth $250,000 and your earthquake insurance deductible is 10% of the replacement cost of the dwelling, you will need $25,000 in reserves to pay for your claim before the insurance kicks in.
- Take an inventory of your home. Periodically, videotape your home inside and out and keep a copy of this in a secure location. Keep an itemized list and receipts for large purchases. The more documentation you have, the easier and faster your claims experience will be.
- Make sure you conduct ongoing maintenance of your home. Any dead trees should be cut down to prevent falling on you or your neighbor’s home. Otherwise, you may be liable for the damage under the liability coverage for your home insurance policy.
- Consider an “umbrella” policy to protect against additional liability claims. This often overlooked form of liability coverage will step in once your underlying liability coverage for your home and auto are exceeded, to pay claims for a suit due to an auto or home accident. A good rule of thumb is to cover at least your net worth.
Special thanks to Scott Moseley from Irmo Insurance for assisting me with this blog.