Chances are you have turned on the evening news to see reports of areas destroyed by a hurricane, earthquake, or flood. Without the proper home insurance coverage, any of these disasters can destroy your home and belongings, leaving you without the resources to rebuild your home or replace your personal property. Having your home properly insured against these disasters is the easiest way to start over if one of these disasters occurs.
Many home insurance policyholders are not aware that flood
coverage is excluded on nearly all homeowner's policies. Flood
insurance must be purchased separately and carries a separate
The National Flood Insurance Program (NFIP) is a federa program that enables you to purchase flood insurance on your home if the home is located in a designated flood zone. Although it is a federal program and is not offered by your insurance company, your agent will be able to help you secure flood insurance and can answer questions about the details of this coverage. If your home is in a flood zone, it is critical you contact your agent to inquire about securing flood coverage on your home.
A flood occurs when an excessive amount of water or mud covers
land that is normally dry. A flood can occur when water rises above the normal level because of heavy rain or because of water runoff from a heavy snowfall.
Floods can also be caused by hurricanes. Although hurricane
coverage is almost unheard of, a flood policy can provide coverage for water damage caused by a hurricane, while your standard home insurance policy can provide coverage for wind and projectiles.
Your choices for dealing with a flood are limited - you can be
proactive and purchase flood insurance to help you recoup your loss in the event of a flood, or you can hope for assistance from the government if a flood occurs. Unfortunately, government assistance is an option only if the president declares the flood as a national disaster. Given the limited opportunity for government assistance, flood insurance is worth the investment because you have the peace of mind of knowing your home will be covered, no matter what, in the event of a flood.
When you purchase flood insurance, you can insure your home for up to $250,000 and your personal property for up to $100,000. Flood insurance is not just an option for homeowners - if you rent your home, condominium, or apartment, you can purchase coverage for your personal property for up to $100,000.
Flood insurance covers structural damage to your home; the repair or replacement of mechanicals, such as furnaces, water heaters, and air conditioners; the cleanup of debris; and the repair or replacement of flooring caused by a flood.
You can determine your flood risk and find out more about flood
insurance by visiting www.floodsmart.gov.
Earthquakes are also excluded by most insurance policies.
Earthquake policies are available that will cover your home in the
event of a loss; however, they often carry high deductibles, which
limits their effectiveness in indemnifying you for damage or a loss
caused by an earthquake.
Because earthquakes are common in California, it is the state in
which earthquake policies are most frequently purchased. Because of the high demand for earthquake coverage in California, the California Earthquake Authority (CEA) was developed in 2003 to provide information and advocacy for California residents seeking this coverage. If you are a California resident and are in need of earthquake insurance, you can learn more about the CEA online at
Some insurance companies will also allow you to purchase an
earthquake endorsement on your standard home insurance policy. In areas where earthquakes rarely occur, the endorsement will be less expensive than in areas with a higher likelihood of earthquakes.
Examine the odds of an earthquake occurring in your area when
deciding if you need this endorsement or not. If you live in California or any other high-risk area, it may be worth the additional premium required to purchase this insurance. If you are not living near a fault line or an earthquake has never occurred in your area, it may not worth the extra cost to purchase earthquake insurance.