Do You Really Need Disaster Insurance
Below is a MRR and PLR article in category Finance -> subcategory Insurance.
Do You Really Need Disaster Insurance?
Owning a home comes with numerous expenses?"routine maintenance, repairs, seasonal preparations, and improvements, not to mention taxes, fees, and monthly bills. In an effort to cut costs, some homeowners question the necessity of disaster insurance.
Understanding Disaster Insurance
Disaster insurance is an additional coverage designed to protect against events like hurricanes, tornadoes, earthquakes, and floods. While standard home insurance policies typically cover hurricanes and tornadoes, they often exclude damage from floods and earthquakes. Therefore, if you want this protection, you’ll need to purchase additional insurance, which can be costly depending on your location.
When Disaster Insurance is Mandatory
In some situations, disaster insurance isn't optional. For instance, homes with mortgages in designated flood hazard areas in the U.S. must obtain flood insurance through the National Flood Insurance Program. After the mortgage is paid off, it's no longer required, but homeowners should weigh the risks. Flooding can destroy a home, leaving only an empty lot behind. Even those outside flood zones should be aware that standard policies typically don't cover issues like sewer and septic backups, which might occur during flooding. An endorsement for this coverage could be worthwhile.
Considering Earthquake Insurance
Many believe that earthquakes only affect the west coast, but in reality, 39 states have some seismic risk. While earthquake coverage can be pricey in California and the western states, homeowners across the country should evaluate their area's risk and the associated costs.
Ultimately, while disaster insurance can be a significant expense, the peace of mind and financial protection it offers against unforeseen catastrophes may be a wise investment.
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