Wednesday, March 4, 2009

Are You Covered for Natural Disaster?

By Connie Yee

Homeowners may not aware that some natural disasters are not covered by their home insurance policy. For those who live in any floods, earthquakes, landslides, wars or nuclear prone areas, purchasing extra insurance policies may be beneficial. However, homeowners tend to ignore purchasing extra policies because of the high premium and limited coverage. To understand which policies are important and how to purchase them, please read below.

Earthquakes: Typically, the policy is 10-15% deductible but have high premiums that can cost more than $2000 (annually). Homeowners in high-risk locations can purchase the insurance from private companies and state-run insurance pool such as the CEA (California Earthquake Authority).

Floods: The policy cost between $500 to $1000 annually depending on the location of the home. However, the insurance would be useful only if it was purchase 30 days before the natural disaster occurs. Homeowners can purchase the flood insurance from the National Flood Insurance Program or private companies.

Hurricanes: Typically, the policy is 2-15% deductible. Policy tends to vary by state. In state such as Alabama, Florida, Louisiana, Mississippi, etc. the government provides windstorm coverage for those who cannot afford private coverage.

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