Dealing with disaster: Understand your insurance -

Dealing with disaster: Understand your insurance

A catastrophe is defined by the insurance industry as "a natural disaster that causes $25 million in damages." But the physical and emotional toll to individual homeowners can't be measured.

From tornadoes tearing through the Midwest to hurricanes ravaging the east coast and floods drenching the south to the constant threat of "The Big One" hitting the west coast, the message has become painfully clear to many in the past few years: 

A natural disaster can erase your entire home in a matter of seconds. 

You might think that your homeowner's insurance policy will protect you – and it should – but a recent study shows that while 96 percent of homeowners have insurance, nearly 64 percent of homes don't have adequate coverage. 

"A homeowner's policy just doesn't cover everything," says Allstate Insurance agent Maurice Stephens. "It's not a blanket. It's not going to cover everything that could possibly happen." 

Understanding insurance policies can be difficult, and depending on which company and policy you choose, the unknowing consumer could be left out to dry. 

"Flood insurance is typically excluded from a homeowner's policy, and there tends to be some confusion about a hurricane brining in so much rain and it coming in the window and that being considered a flood – it's not," Stephens explains. 

Earthquakes are also typically excluded. But wind storms, tornados and hurricanes could be part of your coverage, depending on the state where you live and the wording of your policy. 

The bottom line is, if you have any doubts about your policy, ask your agent.

Stephens says that the most crucial question you can ask is, "What will my deductible be in case of damage?"

It will take 15 days once you purchase a policy for it to be enacted. And know this: Many companies stop writing new policies once a hurricane watch or disaster warning is issued, so make sure that you are covered while the skies are still blue. A little preparedness can go a long way should a catastrophe strike.

Tips for dealing with a natural disaster:

  • Contact your insurance agent immediately, especially if you have to evacuate. They need to know where you can be reached.
  • Keep receipts of all out-of-pocket expenses. Most policies will reimburse you.
  • Take photos or video and compile a list of all damaged or destroyed property.
  •  Get a detailed estimate for repairs. And remember, the most serious losses will be given priority.

Copyright 2011 America Now. All rights reserved.

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