insurance

Natural Disasters. No matter what part of the world you live in, there is a strong likelihood that some kind of natural disaster occurs there. Sometimes this happens with regularity, like flooding near the banks of the Mississippi River in the U.S. or Flash Floods in pretty much any plains area. In many places, Disasters are rare, but still possible given the right conditions.

When disaster strikes, people tend to scramble for their insurance papers to see if they have coverage, and are often surprised to find that they don’t. That doesn’t make sense, does it? When you move to an area that has a likelihood of a natural disaster (or two, or three), it makes sense that you would get insurance that covers them just to be safe right? Unfortunately, this is often not the case. When people move, they tend to focus on the costs associated with moving so they cut costs where they can. Often what will happen is people will purchase the minimum amount of insurance with the intent of upgrading it in the future. Even when people remember to do this, some disasters may still not be covered.

Here is a list of disasters standard insurance may not cover:

Flooding: It is interesting to note that different flooding sources are treated differently by insurance companies, so if your house is flood by a plumbing leak, it is often  covered where a natural disaster related flood may not. This type of coverage is typically not available unless you live in an area that commonly floods.

Storm Coverage:  When it comes to storms, wind damage is generally covered. This includes damage caused by microbursts, tornadoes and hurricane winds. One thing that Storm Coverage typically does not cover is flood damage.

Earthquake Damage: By far, this disaster seems to have the most factors to its cost. Building materials, insured value and location are just a few factors. While it may be less useful in areas where earthquakes are not particularly strong, earthquake coverage is readily available, and cheaper than in higher activity areas.

Volcanic Events: Most insurance policies already cover volcano damage coincidentally. This is because most standard policies cover things like ash, dust, particles, lava and their removal. What is generally not covered is Landslides, Shockwaves, Tremors and ash deposited after the initial event, such as ash carried in by the wind. People who live near volcanos can purchase additional coverage (at additional cost), should they feel the need to.

It seems that the bottom line here is to prepare early. When you plan on buying or renting, research the area you would be living in, and make sure your policy covers the natural disasters that occur there. You should also map out yours costs well ahead of time so that things like insurance coverage seem less of a burden. A little planning can go a long way, and you’ll often find that insurance companies don’t want to alter your policy after something happens; they’re picky like that.