Natural disasters can cause devastating damage and expensive losses. Here are a few things you should know if you want your homeowner's insurance coverage to protect you in case of such disasters.
Coverage Is Not Automatic
The first thing you should know is that standard home insurance doesn't cover every natural disaster. The type of damages your policy covers depends on the type of policy you have. For example, the HO-3, which is the most popular policy, covers natural disasters such as wind, wildfires, and lightning. However, it excludes earth movements like sinkholes and earthquakes. Scrutinize your policy or consult your agent to understand everything your policy covers or excludes.
Waiting Period May Apply
Many forms of insurance include waiting periods before coverage comes into effect. This prevents people from buying coverage only when they are facing almost certain loss, which could cripple insurance companies financially. Home insurance also includes waiting periods, especially for natural disasters. In fact, whenever an extreme weather event (such as a hurricane) is imminent, insurance companies usually put a freeze on new companies until the disasters pass.
Waiting periods vary, but they are usually in the region of 30 to 90 days. Therefore, don't wait until a natural disaster is announced to buy coverage. Buy coverage early enough so that it will help you if a disaster does strike.
Potential Slow Claims
Another thing you should know is that home insurance companies receive numerous claims if a natural disaster strikes a large area. If a hurricane strikes a city, for example, it's likely to affect thousands of homeowners. Insurance companies typically handle claims on a first-come-first-serve basis. Thus, the sooner you submit your claim, the sooner the company will start working on it, and the sooner you will get the compensation check.
Multiple Claims
Lastly, you should note that a series of natural disasters may trigger multiple claims instead of one big claim. For example, if your area is experiencing a windstorm, your home might be hit by a series of wind or flooding in the span of a few days. Maybe the first day the wind damaged the roof, the second day you experienced wind damage again, and the third day your house experienced flood damage. When it comes to filing a claim for your damages, you need to file a claim for each incident. You will also have to pay a deductible for each event. You might not have your claim paid out in full if you only submit a single claim.
Do you remember the last time you experienced an accident or an injury? Life can surprise you sometimes, which is why it is always smart to have a few life insurance policies in place. I used to think about everything that I had and everything that I could lose, and it occurred to me that I couldn't risk taking any chances. I wanted to begin this blog to share my perspective with other people, so that you don't have to worry about finding the right insurance company. Read more here to figure out what you need to do to choose a better plan.