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Disaster Decision - Do You Need
Insurance?
By Jakob Jelling
The expenses involved with owning a home can be overwhelming at times -
routine maintenance, repairs, seasonal preparations, improvements. Not to
mention taxes, fees, and all those monthly bills. Some homeowners, in trying
to reduce their expenses, wonder if they really need disaster insurance.
Disaster insurance is typically defined as additional homeowner's insurance
to cover events like hurricanes, tornadoes, earthquakes, and floods. Home
insurance policies typically cover hurricanes and tornadoes (review your
policy to be certain in covers damage from such events). But often damage
from floods and earthquakes isn't covered. This extra insurance, if desired,
must be purchased in addition to your standard homeowner policy, and it can
be expensive, depending on where you live.
Because disaster insurance can be expensive, it's a type of coverage some
homeowners opt not to buy. But in some cases they are required to buy. For
example, mortgaged homes in the US that are located in designated flood
hazard areas are required to buy flood insurance through the US National
Flood Insurance Program. Of course, once those mortgages are paid, there is
no longer a requirement to buy such insurance.
But homeowners in those areas should carefully consider whether they really
want to take the risk that their home and everything in it could be swept
away, leaving them with nothing but an empty lot. Homeowners that aren't in
designated flood hazard areas should still know that floods can cause
plumbing problems, like sewer and septic backups. These often aren't covered
in a standard homeowner's policy, and they may want to consider an
endorsement for coverage.
In the US, many tend to think that only the area along the west coast is
subject to earthquakes. This isn't true however, and 39 US states have some
potential for earthquakes. Coverage for seismic events can be very expensive
in California and other western states, but homeowners in other states
should evaluate the cost vs. the earthquake risk for the area where they
live.
About The Author
Jakob Jelling is the founder of
http://www.cashbazar.com. Visit his website for the latest on personal
finance, debt elimination, budgeting, credit cards and real estate |
