Natural disaster insurance is a necessity for many homeowners and businesses in natural disaster areas. This type of insurance can help protect you from these dangerous elements and keep your financial investment intact. Most importantly, they can also give you a way of protecting the people who live in your home or who work in your business.
Understanding natural disaster insurance requires knowing what it is, what it will cover, and the various companies that offer it. By reading this information, you should have a pretty good start on picking natural disaster insurance that is right for your unique needs.
Your Guide to High-Quality and Effective Natural Disaster Insurance
Before discussing all that you need to know about natural disaster insurance, it is a good idea to understand what you’ll be learning in this article. First of all, you’ll learn about the definition of natural disaster insurance. Then, you’ll learn what kind of problems it covers and those that it doesn’t. Then, you’ll get a detailed guide to picking a company and policy for natural disaster insurance.
The Nature of Natural Disaster Insurance
A typical home or business insurance policy is designed to protect you from certain types of natural disasters. For example, it will protect you when fire or lightning hits your home. It will also provide you with financial coverage after an explosion or if a riot affects your area in some way. These items typically require a specialized plan that focuses specifically on these concerns.
However, natural disaster insurance is a little different. In some circles, it is known as catastrophe insurance. This type of policy kicks in when you are struck by a natural disaster that goes beyond typical owner’s insurance. For example, it helps to cover damage from earthquakes, floods, hurricanes, and even terrorist attacks.
Those who get this kind of insurance usually purchase it if they are in an area that is prone to these types of problems. Knowing when natural disaster insurance is necessary is the most critical step in getting excellent coverage. There are many people and businesses for whom this type of insurance isn’t likely to be a concern.
Gauging Its Necessity
The most damaging types of natural disasters are hurricanes and earthquakes. For example, Hurricane Katrina caused an average of $41,100 in financial damages per home or business when it struck. Earthquakes can cause a similar range of damage. Natural disaster insurance will help to pay off this damage and keep you on track financially.
However, if you live in Iowa and are over 1,000 miles away from a hurricane or earthquake zone, you may not need natural disaster insurance. That said, some areas in Iowa may be prone to extreme floods in rainy seasons. If this holds true for your city, consider purchasing a natural disaster insurance policy to ensure that you are protected.
Another important consideration is the type of disasters that have struck the area in the past. While past incidents are by no means an indicator of future events, they can be used in a predictive manner. For example, a tsunami may seem difficult to predict or appear to happen at random. However, you can usually expect one when a massive earthquake hits a coastal region.
Choosing a Provider
When it comes to natural disaster insurance, there are many different providers. We have streamlined our list to include some of the most trusted and highly reviewed available. These companies are rated based on their overall insurance quality and their attention to natural disaster insurance necessities. These companies include:
- Safeco Homeowners
- Erie Homeowners
- Farm Bureau Homeowners
- Progressive Homeowners
- Metlife Homeowners
- Foremost Homeowners
- AIG Property Insurance
- The Hartford Business Insurance
Each of these companies has different types of coverage options that are designed for homeowners and business people. You can add different disasters to your policy, remove them, and increase or decrease your premium payments. Understanding these options helps you to understand your natural disaster insurance needs better.
Creating a Policy for Your Needs
When designing a natural disaster insurance policy for your home or business, take the time to understand the costs behind it and what kind of disasters are likely to hit your area. For example, flood insurance typically costs $540 or so on average every year. Only pay for this insurance if it covers all of your replacement needs and if you are in an affected area.
There are other considerations that you need to make before buying a policy. For example, if you find a plan that is inexpensive but which leaves out repairing carpet damage, try to find one that includes this coverage. Often, you can indicate what type of repairs and coverage that your policy will manage. This action will require sitting down and spending a few hours going over detailed and complex paperwork with your insurance agent.
Tips for Choosing Natural Disaster Insurance
When you are going over your policy with your insurer, make sure to take the time to check it for the following points:
- Coverage of the building structure.
- Replacement costs for items inside of the building.
- Vehicle repair or replacement costs.
- Treatment costs for health concerns caused by a disaster.
- Cleanup and replacement fees.
- Tree and debris removal coverage.
- Neighboring property coverage.
The last point is particularly crucial because it can protect you when a tree or an object from your neighbor’s yard impacts your home during a natural disaster. You also need to consider how much you pay in your premiums every month. Raising your premiums will lower your deductible and vice versa.
If you are willing to pay an extra $100 to $200 per year on your natural disaster insurance, your deductible will fall dramatically. This action means you will have to pay less money when a significant disaster strikes your area.
As you can see, natural disaster insurance is a necessary item that can help protect you from severe damage. However, it is essential to choose a provider carefully and to tweak your policy to meet your needs. Failure to do so could cause you to pay too much money or get a policy that doesn’t cover everything.
Take the time to talk to your agent about natural disaster insurance. They should be able to give you the help you need to gauge its necessity. They can also help create a policy that is perfect for you and which covers all of your natural disaster insurance needs.