Predicting the weather or the natural disasters caused by the Mother Nature is futile as you may already know if you have watched the weather man/woman failing again and again to predict rain or shine. Unfortunately this is the shortcoming of our science at the present day, and thus the only constructive step you can take to protect yourself against natural calamities is to have proper insurance in place so that you can get back to your normal life after damages to your possession.
You must be informed about all aspect of your home insurance so that you know what sort of protection you have for each situation. Unfortunately many homeowners are not aware how their insurance works in case of a hurricane or wind storm. Most folks are under the impression that their insurance will pay for the full market value of their property. However, that may not be the case as various insurance companies pay for either actual value of your house or the cost of rebuilding it and there is a significant difference between the two.
It is therefore important for you to look at your insurance policy especially if you happen to live in the regions that are more prone to natural calamities such as storm, hurricane, flood, and earth quake. Read your policy carefully to know how and for what you are covered. As you read your policy make sure to keep these points in mind.
1. Wind damage: Not every home insurance policy covers wind damage, and wind coverage is essential for your home if you happen to be in the path of hurricane or strong storms. Many homes get damaged in the storm due to strong winds and thus you need to insure that you have wind coverage especially if you happen to live near the coastal areas.
2. Flood: Homeowners insurance do not cover flood as flood is a separate policy that must be purchased. Flooding is very common during storms either due to heavy rain or tidal waves. Apart from hurricane and storms, many homes are also in areas marked as flood zone. Check to see if you are in the flood zone and if so, you should have flood policy to protect against rising water.
3. Different set of Deductibles: Did you know that your deductible for wind damage is not the same as another deductible such as theft and burglary? Majority of homeowners are not aware that there are multiple deductibles and this could become a problem when seeking reimbursement for damages. The deductible for wind is usually a percentage of your coverage. So if you had a 5% deductible on a $250,000 policy, you would be spending the first $12,500 out of your pocket, Oooch!
4. Living Cost: Your insurance policy may cover your living cost if you had to live in another place while your home is under repair due to storm damages. However, you insurance may not cover your living cost, if you were forced to leave your home because a storm was approaching.
5. Market Value V.S Replacement Cost: This is a very sensitive issue that many homeowners simply overlook. Does your policy covers the Actual Cash Value (ACV) also called the market price or the replacement cost. The market price of your home is the value of similar homes sold near your house. The replacement cost is the cost of building a home similar to yours from new. There are times when one has advantages over the other. Remember that Actual Cash Value covers the cost after depreciation. Thus if your sound system was purchased three years earlier for $1,000, it’s Actual Cash Value after depreciation may only be $200 and the same valuation may apply to portions of your home.
Therefore it is a good idea to look at your policy and find out about the details of your coverage. If you do not have insurance or looking to get one, you can start by comparing home insurance quotes from major provider on this site so that you look at their policies, rates and quotes side by side and find the best coverage that is suitable for your home.
