Why Natural Disasters Should Have You Taking a Second Look at Your Home Insurance

Written By Mary Beth Eastman
Last updated February 20, 2020

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October 29, 2018

Simple. Thrifty. Living.

More and more it seems U.S. residents encounter devastation at the hands of natural disasters. No amount of money can fully replace what has been lost in these events, but for the families affected, having the right insurance coverage can help cushion the financial blow.

Some may be surprised to learn, however, that they aren’t covered as fully as they think. These experiences may serve as a cautionary tale for others who should take the opportunity to review their home insurance coverage now, so they know what to expect if the unthinkable occurs — and how to get the right protection in advance.

It’s clear that a tornado or hurricane is not a homeowner’s fault. That doesn’t automatically mean your insurer will kick in and offer support. Take a look at your policy to understand what’s covered. While wind, fire, and explosion coverage may protect you in the case of a tornado, you may not have coverage for floods or ground movement, such as in the case of an earthquake or the after effects from a tornado. The good news is that you may be able to purchase additional coverage to protect you from these events as well. You can also look into a home warranty company, like HomeServe USA, that can help cover things that insurance doesn’t.

Insurance companies sell policies on the basis of risk that they will be used. That means, the more likely it is you’ll have to use your coverage after a natural disaster, the more specific or expensive your policy may become. In certain geographical areas, home insurance policies may actually exclude damage from certain weather events, simply because the risk is greater. According to Consumer Reports, people living near the coast of Texas may not have the same coverage for wind damage. In California, some residents opt for additional earthquake insurance.

Even if you have coverage, you likely have to pay some expenses out-of-pocket. Know your deductible rate so you can be prepared for the financial hit or consider another kind of insurance. It’s a good idea to see if you have full replacement or another type of coverage. This determines whether the insurer is obligated to ensure you have a replacement for what is lost or to pay out what the lost item was worth.

Also, when reading your policy, try to envision what life will be like for you in the moments following a natural disaster. Will the insurer pay for temporary accommodations if you lose your home? Ask the tough questions now so you can be sure what to expect later.

No one likes to think about natural disasters, but smart financial planning means reviewing your present coverage. If you need to make changes, ask a lot of questions and try to understand as much as possible whether you can rely on your home insurance to help you rebuild.

About the Author

Mary Beth Eastman

Mary Beth Eastman serves as the content manager for Simple. Thrifty. Living, where she is dedicated to helping readers use money and credit wisely. Mary Beth believes that access to the right financial information paired with a growth mindset are essential tools for getting out of debt and building wealth. Mary Beth has a degree in Journalism from Bowling Green State University and has focused her 20-year journalism career on putting readers front and center, carefully considering their concerns and presenting information that will help them in their everyday lives. She has won numerous statewide journalism awards. Her writing on personal finance as been featured on numerous websites in addition to Simple. Thrifty. Living, including Huffington Post and Lexington Law blog. Mary Beth resides in Pittsburgh, Pa., with her family and two rescue dogs.

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