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Protecting Your Home from Mother Nature's Big Bad

Posted in: Home Insurance Articles

By Anthony M. Peck
Feb 23, 2009 - 11:06:17 AM

Protecting Your Home from Mother Nature's Big Bad: A Homeowner's Guide to Homeowner's Insurance and Natural Disasters

On average, 1,000 tornadoes touch down in the U.S. annually.

They happen every day. Wildfires sweep through the hills of California, hurricanes wreck havoc along the coastline of the Gulf of Mexico and tornadoes have their own private hoedown in the panhandle. Natural disasters are a fact of life, and as a homeowner it's going to be your job to ensure that your home is protected by a good homeowner's insurance policy when Mother Nature's own "Big Bad" comes a' knockin'.

The first thing that you as a homeowner need to know is what, exactly, is covered in a standard homeowner's insurance policy. Most insurance policies that you buy from voluntary insurers (i.e. companies that sell you coverage because they want to rather than because there's a government agency somewhere telling them they have to) include a package policy that ensures coverage if your property is damaged by:

· Fire

· Lightning

· Windstorm

· Hail

· Explosion

· Riot

· Civil Commotion

· Aircraft Collision

· Vehicle Impact

· Smoke

· Vandalism

· Malicious Mischief

· Theft

· Breakage of Glass

The Facts About Natural Disasters and Your Home

· 90% of presidentially declared disasters involve flooding.

· Homes in a high risk area have a 26% chance of suffering flood damage during a thirty year mortgage

· Hail causes an estimated $2 billion in damages every year.

· On average, 1,000 tornadoes touch down in the U.S. annually.

Surprise, surprise, earthquakes and floods usually aren't part of a standard policy package-and if you live in a high risk area you may find that insurance companies are either going to deny you coverage or charge you an arm and a leg in premiums every year. That doesn't just apply to earthquakes and floods. Homes in a high risk area for hurricanes, tornadoes or other natural disasters may come with a homeowner's insurance policy that boosts the premiums and deductibles in exchange for a minimal amount of coverage on your property.

If there's a good chance that your insurance company is going to have to pay for it, they're not going to want to cover it.

There are two types of natural disaster provisions found in most homeowner's insurance policies:

1) All Perils. All perils lists what natural disasters are not covered by the homeowner's policy; anything else should be covered by the company. All perils opens the door to argument if an insurer attempts to wriggle out of paying a claim on an unforeseen circumstance not typically seen in a certain area; a blizzard striking Florida in the middle of August, for example.

· Tornadoes can have wind speeds of up to 200+ mph.

· Wildfire destroys approximately 14.5 million acres of land every year.

Named Perils. A named perils policy is the insurance company's best friend, because it details exactly under what circumstances the company will be willing to pay out a claim. Any damages caused by disasters not included in that list are considered to be the sole responsibility of the homeowner.

The good news is that the government has finally cracked down on the aversion of most insurance companies to insuring properties that will almost certainly be involved in a homeowner's insurance claim and instituted federal guidelines for involuntary coverage for high risk areas. The NFIP is one example, a federal program designed to guarantee homeowners in high risk areas protection from flood damage.

Yes, sometimes it's a good thing that Big Brother is watching.

The bottom line is that you don't want to leave any stone unturned when it comes to protecting it from the damages caused by Mother Nature's handiwork. Your home is the biggest investment that you will ever make, not just in money but also in time and emotions. This is the roof over your family's head. Are you going to let a little thing like a natural disaster take that away from you?