Did You Do Your Geology Homework Before Buying Your Homeowners Insurance Policy?

Did You Do Your Geology Homework Before Buying Your Homeowners Insurance Policy?

When you're shopping around for homeowners insurance quotes it makes sense to invest in an all-perils policy, right? Yes, it's going to cost you a little more each month, but that balances out when no one hands you any nasty little surprises you weren't expecting. Before you walk around feeling too confident, however, make sure you know what your all-perils insurance really covers.

No One Really Reads Their Homeowners Insurance Policy-Right?

Have you ever looked at a printed-out copy of your homeowners insurance policy? If you were going to be perfectly honest the answer is probably no. Those things are 50 pages long! I shudder sometimes to think of the amount of trees we kill each year providing homeowners with hard copies of their homeowners insurance policies. I am absolutely convinced entire forests have been destroyed by well meaning insurance agents. When faced with 50 pages of tiny print and more insurance-ese than English most homeowners just sign on the dotted line, smugly confident that they're well covered for whatever happens to come their way.

Fast-forward five years. Winter flooding completely decimates the basement, heavy snow and ice sends the roof crashing down or hurricane force winds annihilate the siding. These same smugly confident homeowners file homeowners insurance claims with their insurers for the damages…only to find out their homeowners insurance policy isn't going to cover it after all.

Did You Do Your Geology Homework?

Whether geology was your favorite subject in college or you loathed every second of it you're going to want to do a little geological research on your area before you go shopping for either a home or insurance. Otherwise, you may find yourself holding the deed to a house that isn't going to be protected by any homeowners insurance policy.

That's not a position anyone wants to be in.

Dig through the back records on your home and/or the area you're thinking

Experts estimate that there are over 1,000,000 earthquakes every year.

about moving to. Are there many earthquakes? How about windstorms? Flooding? What about mudslides? Believe it or not, none of these are included in a typical "all perils" policy, especially in parts of the country where they happen more than once every thirty or forty years.

If your home is in a high risk area you're going to want to think very, very carefully about buying. Remember, there's probably a good reason you're getting a great deal! These houses are at a high risk to come tumbling down around your ears, and since it's not going to be covered by your homeowners insurance policy you're going to be the one left holding the bag (literally) on all of your repairs.

But Wait! There's More!

The good news is, if you're bound and determined to move to a high risk area for one reason or another (most jobs don't like to give you a lot of choice before they sign your transfer papers) you might be able to shop around for some additional insurance coverage to help fill the gap. Many homeowners insurance providers are willing to add earthquake insurance and flood insurance to your policy for a minimal investment, and that extra coverage can leave you protected.

There are also state and federally run organizations like the Texas Windstorm Insurance Agency and the National Flood Insurance Program that specialize in protecting homes from windstorms and flooding in high risk areas, so if your insurance company isn't willing to pick up the slack you can contact one of these agencies for additional "named perils" coverage.

Whatever route you choose to take, take it. Don't leave the door wide open for your home to be flattened without any kind of homeowners insurance to cover it. Remember, Mother Nature has a wicked sense of humor. The last thing you want to do is find yourself the butt of a joke that's going to leave you holding the bill for hundreds of thousands of dollars in damages to your home.

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• Did You Do Your Geology Homework Before Buying Your Homeowners Insurance Policy? - Jul 20, 2009 - 9:55:18 AM