Survivalx.com Wilderness survival Guide - Floods and Hurricanes Insurance Considerations

Home

Disaster Survival

Hurricane Survival

Floods and Hurricanes Insurance Considerations

sponsors

Floods and Hurricanes Insurance Considerations

Friday, 27 August 2004

Hold on to your current homeowners policy if at all possible. Pay your premiums on time. Know that companies are monitoring claims activity very closely. If, however, you have to go looking for a new policy, you may want to consider the items in the following paragraphs.

It may still be possible to find a good homeowners policy with a private company despite what you have read recently. Try several insurance agents, at least, before concluding you have no choice but to join the state insurance pool. Search out a reputable agent who knows about local building codes, welcomes questions and is willing to explain things clearly and patiently.

The agent should visit your home, inspect your property and present coverages available to you. Understand that all insurance policies are not created equal. Insure to the full value of your home and property. Don’t make the mistake of asking your agent for the "top-of-the-line" policy, paying your premium and then considering yourself adequately protected. Some policies offer "guaranteed replacement cost coverage". Those policies promise that if your 15 year old home is destroyed, the insurer will cover the cost of building a new one just like it.

Many people assume they have replacement cost coverage, when in fact, they have only "actual cash value coverage". Those policies promise that if your 15 year old home is destroyed, you are entitled to a specified amount only. Standard homeowners policies usually cover the contents of a home, up to a specified limit.

Some policies protect contents on a replacement cost basis. An actual cash value policy would entitle you to only the original cost of your possessions. There are special endorsements or riders, if you can get them, that could provide replacement cost coverage for contents under the terms of an actual cash value homeowners policy. Other riders are available to enable you to buy more coverage for expensive items such as jewelry, furs and computer equipment.

There are "catches" to homeowners coverage. A good agent will alert you to them and offer you options. Your house, for example, may have aluminum wiring, which was installed before your local government ordered that all new homes must contain copper wiring. If your home is partially damaged but must be rebuilt to meet local building codes, some insurers may say they are not responsible for anything more than what is provided for in the policy. You can protect yourself by buying a "code endorsement rider". That kind of coverage is especially important.

There is no such thing as "hurricane insurance". Standard homeowners policies protect you from virtually all types of damage a hurricane can inflict except one - flood, or "rising water" damage.

Flood insurance is underwritten only by the federal National Flood Insurance Program and must be purchased separately. Although standard homeowners policies will not cover damage from rising water, such as from storm surge, they will cover water damage from rain driven by winds through damaged roofs or blown-out windows. The part of a policy that offers such protection is called "windstorm coverage". Insurers’ vulnerability to future losses because of windstorm coverage was a major factor in cut-backs in writing new policies Be sure to ask your agent whether you should buy additional coverage to protect you from the "50 Percent Rule".

The rule states that if a structure in a flood zone is 50 percent or more destroyed - by a hurricane or anything else - it must be rebuilt so that its ground floor meets minimum elevation requirements. If the front door of your home now stands at 4 feet above sea level, the government could require that your rebuilt house be twice as high or higher.

Insurers have argued that they shouldn’t have to pay for raising the first floor of a structure unless specifically provided for in a policy. Ask about this. Special endorsements are available to cover elevation costs. Comprehensive auto and boat coverages should protect your car or boat from any damage caused by a hurricane, including flood damage. Ask you agent to make sure you are adequately covered. Raising the deductible may save you money.

Before the Storm: Take a room-toroom inventory with a camcorder. Keep all receipts for all valuables. Make a complete written inventory that lists everything down to the number of pairs of socks you own. Keep all records in a safe deposit box. Update the listing once a year. Keep a copy of the inventory at home.

HANDLING INSURANCE

NATIONAL FLOOD INSURANCE PROGRAMS

For most of us, our home is by far our most valuable lesson. But every year, more homes in the U.S. are damaged by floods than any other natural disaster. People who live near water are not the only ones who experience flooding. Floods move, and can spread for miles. They can have strong currents that, in a few moments, can sweep away everything that took a lifetime to accimulate, leaving a thick residue of mud and debris behind. It’s not just high risk areas that are flooded. Between 25 and 30 percent of flood insurance claims come from medium or low flood-risk areas. The fact is, a flood could happen to you. Fortunately, you can protect yourself and your future from the crippling financial losses often caused by flooding through a program administered by the Federal Emergency Management Agency (FEMA).

Under FEMA's National Flood Insurance Program (NFIP), Federally backed flood insurance is available in communities that adopt and enforce regulations to reduce flood losses. Flood insurance provides coverage that your homeowners insurance doesn't — coverage for damage caused by floods. The good news is that Martin County and its municipalities participate in the NFIP, so flood insurance is available to you. Flood insurance is far better protection than depending on Federal disaster assistance, which is only if a disaster is Federally declared. If you have a flood insurance policy, you can be reimbursed for all your covered losses, even if a disaster is not Federally declared. In contrast, Federal disaster assistance is often a loan — repayable in full — with interest!

With a flood insurance policy all you have to pay is one annual premium. Then, if you suffer losses due to flooding, you will be reimbursed for your covered losses, and you’ll never have to pay a nickel back.

Flood insurance is affordable. The average flood insurance premium costs about $300 a year for an average of $98,000 of coverage. However, paying back a $50,000 disaster home loan, for example, will cost an average of $300 a month—for an average repayment period of 18.5 years! And of course, if you are not insured, and a Federal disaster is not declared, your home and belongings may be ruined with no hope for recovery. Protect yourself, your home, your family, and your financial future.

Call your insurance company or agent to ask for details about how to buy flood insurance. Do it today. Policies go into effect 30 days after a policy is purchased. Protect your home and your family today. For more information about the NFIP and flood insurance, contact your insurance company or agent, or call the
NFIP at 1-888-CALL-FLOOD, ext. 314.

. As long as your community participates in the National Flood Insurance Program, except for areas protected by the Coastal Barrier Resources Act, you can purchase a flood insurance policy. Whether you live in an area likely to flood or in one that is at low risk, you can purchase flood insurance.

. There are times when you may be required to purchase flood insurance if you buy a house in a designated high risk area and receive a mortgage loan from a Federally regulated lender your lender must, by law, require that you buy flood insurance.

. Coverage is available for residential and commercial buildings and contents, and can also be purchased by renters:

• Up to $250,000 for single-family, twoto- four family, and other residential buildings

• Up to $500,000 for nonresidential buildings including small businesses

• Up to $100,000 for contents coverage for residences for owners and/or renters

• Up to $500,000 for contents for businesses including small businesses

Points to remember if you have a National Flood Insurance Policy:

1. Often you may be reimbursed for preventive measures taken to reduce flood damage to an insured building.

2. Policy holders may also be reimbursed for the cost of removing insured contents from a building that has been declared by community officials to be in imminent danger of flooding.

3. NFI insures buildings and contents. This includes almost every type of walled and roofed building that is mostly above ground.

4. All direct losses by flood are covered in the policy. Flood is defined as "inundation of normally dry areas by overflow of inland or tidal waters or runoff surface waters or mudflows."

5. Also covered are losses resulting from land collapse caused by water activity exceeding established levels.

6. Property not insurable under this program are livestock, motor vehicles, land growing crops, shrubbery, roads, etc.

STEPS IN MAKING AN INSURANCE CLAIM

1. Contact your insurance agent or company immediately and report the damage.
Give your name, address, policy number, and the date and time of loss.

2. Take pictures of the damage, if possible, before beginning repairs.
If you repair small items such as TV antennas, window coverings, or fences before the adjustor arrives, it may be difficult to prove the damage. Pictures can also be used as evidence for tax deductions.

3. Protect your property from further damage or theft.
Patch roofs temporarily. Cover broken windows with boards or plastic. If household furnishings are exposed to weather, move them to a safe location for storage. Save receipts for what you spend and submit them to your insurance company for reimbursement.

4. Dry out water-damaged furnishingsand clothing
as soon as possible, to prevent fading and deterioration. You may wish to take some items to a reliable dry cleaner.

5. Keep accurate records:
a. A list of cleaning and repair bills, including materials, cost of rental equipment and depreciation of purchase equipment.
b. A list of any additional living expenses, you incur if your home is so severely damaged that you have to find other accommodations while repairs are being made, including motel and restaurant bills, home rental, or car rental.
c. A list of all actual losses, including furniture, appliances, clothing, paintings, artifacts, foods and equipment, regardless of your intent to replace the objects. Photographs of ruined homes or objects are excellent evidence for later documentation. Try to document the value of each object lost. Bills of sale, canceled checks, charge account records and insurance evaluations are good evidence. If you have no such records, estimate the value, and give purchase place and date of purchase. Include this information with your list.

6. Contact a reputable firm to have your damage repaired.
Beware of door-to-door salesmen. Sometimes undependable workers enter a damaged area, make cheap repairs, and leave before the residents discover that the repairs are inadequate. If your local contractor cannot do the work, ask him to recommend someone.

7. Don’t be in a hurry to settle your claim.
Although you may want to have your damage claim settled as quickly as possible, it is sometimes advisable to wait until all damage is discovered. Damages which have been overlooked in an early estimate may become apparent later. If you are dissatisfied with the settlement offer, talk things over with your agent and adjustor. Check your policy to see what settlement steps it outlines.

Show comments (0) - Add comments to this article:

You are not authorized to leave comments - please login.

recommended