Catastrophe Insurance

You could face financial ruin if you needed it but didn’t have catastrophe insurance.

Having catastrophe insurance coverage to mitigate the effects of a loss is not only a smart move, but it’s also a requirement of lending institutions like banks and credit unions. Insurance providers form the backbone of modern civilization. You wouldn’t be able to get a mortgage to buy a house or a car or, in some cases, a business loan without insurance.

Home Insurance :

Your home insurance will cover a multitude of things that can happen to your home, including fire, burglary, etc. Structure and content are covered. Since there are just as many if not more losses for which you will also not have coverage, it is important to take the time to read your policy and understand what is excluded.

Tenant insurance:

I’ll bet you that if you ask people you know who rent if they have tenant insurance, most of them will say no.

Renters insurance is probably the “best buy for the money” when it comes to insurance. For an annual payment that’s likely less than a week’s pay, most tenants can purchase tenant insurance and enjoy peace of mind knowing their furniture, clothing, and other personal effects are covered.

Let me wholeheartedly encourage you to purchase tenants insurance and if you are a landlord renting out part of your home, you should encourage your tenant to purchase tenants insurance.

Ask your lawyer if you can require tenant’s insurance as a condition of renting or renting your house or apartment. It is so important.

Flood Insurance for Homeowners:

Flooding is caused by rising water and should not be confused with water damage caused by roof leaks or wind-driven rain. Also remember that the president does not have to declare a disaster for you to claim payment from your flood policy.

Floods are not covered by your home insurance policy and so if you want flood cover you will need to purchase a flood insurance policy.

When shopping for a home, it’s a good idea to research the area you’re considering buying your home in to see if it’s in a flood zone.

Although you don’t need to be in a flood zone to purchase flood insurance, the cost will be much higher if you are in a floodplain otherwise known as a “flood hazard zone” (SFHA).

Your insurance agent can check the flood map to see if your area is in a high-risk, medium-risk, or low-risk zone.

The maximum amount of coverage you can purchase for your home is $250,000 and its contents $100,000. It will be different if it is a two-family house. Will it be enough to rebuild your house if it is washed away by a flood? Keep this in mind when shopping for your dream home.

Flood insurance for tenants:

Just as renters insurance will provide peace of mind for you and your family, you should know that it does not cover floods and your landlord’s flood policy will not cover your belongings either. .

Take my advice and also buy flood insurance, it is inexpensive and will be one of your best buys. The maximum you can purchase is $100,000 and will give you peace of mind knowing there will be financial assistance for you should you suffer a loss…

Hurricane Catastrophe Insurance:

Most, if not all, insurance companies will include a very large deductible in your home insurance policy for hurricane damage. This is usually a percentage of the amount of your insurance coverage on your home and ranges from 3% to 7%.

Here’s an example: Let’s say your home is insured for $200,000. Your deductible is 5% ($10,000), hurricane damage to your home is $50,000. You will only be paid $40,000.

Are you able to offer a $10,000 deductible to repair your home if it has been damaged? What if the damage was less than your deductible? You would not be paid anything by your insurance company. Your disaster insurance emergency fund should be at least equal to your deductible, but higher is certainly recommended.

Earthquake insurance:

Do you live in an area known to have earthquakes? If so, your disaster insurance plans should include earthquake insurance. Be aware that your home insurance policy will not cover you in the event of an earthquake.

Many insurance companies offer special “earthquake insurance” and although cover is not compulsory unless your mortgagee requires it, the deductible can be up to 15% and sometimes more. This is important to know when shopping for a home when setting your home maintenance budget.

Tornado insurance:

It is the most devastating of all natural disasters. Tornadoes can shred a neighborhood like a wood chipper, leaving only unrecognizable rubble. Unfortunately, there is no “tornado insurance” available. You will have to depend on your home insurance to cover you.

I spent time on flood, hurricane and earthquake insurance, as these are the most common natural disasters. However, this is in no way intended to ignore the many other natural disasters that you may be exposed to if you live in such areas.

Speak to your insurance company or agent to find out how much you are covered and if there is a mandatory deductible that applies to a claim for damage to your home.

Having spent time as an insurance agent and also as a real estate agent, I would like to caution my clients about the importance of proper insurance. As a real estate agent, I would remind them as much as I remind you that before buying “Think about how easy or difficult it is to sell your home if it is in an area known for a particular type of disaster”.

Having the right gear on hand will also go a long way in your preparations.

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