It seems to me that as the world goes on its merry way and the weather does what the weather does (for whatever reason), I am being asked more and more about flood and earthquake insurance.
FLOOD INSURANCE: We purchase this coverage through the US government. There are other companies that will insure for flood, but not as affordably. Just a few things to know:
- The structure of your home. There are specific structural conditions that have to be met before your home is accepted for coverage. Also, there is a cap on the amount of coverage you can purchase. Your agent can go over those conditions.
- Your personal possessions. There is a coverage amount cap for your personal items.
- The effective date for new coverage is 30 days AFTER the application is approved. There are situations where exceptions can be made and coverage placed more quickly.
- Any outbuildings (structures not attached to the home: detached garage/shed/barn) MUST have their own policy for structure and contents. They are not included in the home policy.
- The cost of the coverage is based on the structure and where the structure is located.
- For the coverage to kick in the “flood water” must effect more than just your home. If you have a water leak and it effects only your home, that would not be covered by flood insurance.
EARTHQUAKE INSURANCE: This coverage might be purchased through the same company with whom you have your homeowners insurance. If not, there are very good stand alone earthquake companies that can help. A few thoughts:
- To buy or not to buy: After a wide spread, bad quake, FEMA usually comes in with low interest loans to help with the cost of rebuilding. For those of us with earthquake policies, we would need a loan for the amount of our deductible (10%, 15%, 20% of that which the house is insured). For those without insurance the loan would be for the full amount to reconstruct (up to the amount of coverage) and, since they would still be paying their mortgage, have two loans for one house.
- I mentioned the deductible above. An example: if your home were insured for $200,000, a 10% deductible would be $20,000. This would be the first dollar paid to repair your damaged home. Good and Bad news alert: If the damage is less than the deductible, the earthquake insurance would not kick in.
I know there is more about which we could talk regarding these coverages, but it would be best to give us a call and talk over your unique circumstances and questions. 800-659-7363