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Financial Prep for Natural Disaster Season

End-of-time doomsayers predict civilization’s demise every nine minutes. They cite revelatory Scripture and natural disaster to support their belief. Money Examiners believes revelatory Scripture passages are too often interpreted to suit one’s pre-held belief. Natural disasters, on the other hand, good grief! Did we have some of that nonsense last summer, or what? Whether or not they herald end-times, natural disasters crop up nowadays with ferocious frequency.

Is there a tune-up or coverage tweak you should perform on your insurance profile? Are your precious ones protected when disaster strikes? Because, strike it will, from the sky, ocean, or Mother Earth’s very crust. Are you all right…or not?

Wildfires: Your homeowner’s policy has holes (Did you know that damage from sinkholes is usually not covered?) but it performs well in case of fire, including wildfires. We must ask, however, if your coverage limits are adequate. Experts remind us to look carefully at the downline items. Those are the smaller print lines underneath liability and property damage. Be sure the policy generously pays out under “loss of use.” Most homeowners who suffer a total loss spend thousands on meals and hotels. Start at $13,000 in loss of use coverage and go up. Of course, your family size and children’s ages make a difference. Teenagers cost more than toddlers, but you already know that.

Hurricanes: One Money Examiners reader said this. “I don’t get why anyone moves to Florida.” Yet, thousands do every year. Hurricane Alley is your natural disaster sticker price for sunshine and citrus. Hurricane coverages in homeowner policies are dicey. Wind damage might be covered. But, it may come with a separate (higher) deductible. Did you see the video last year that showed storm surge? Homeowners’ policies cover those kinds of losses…sometimes. Visit your agent, or video chat with an 800 number if your company doesn’t offer local agents. But, you must find out exactly what the next hurricane with the cute name means to your family.

Floods: Standard homeowners’ and renters’ policies offer no protection from loss to floods. That said, flood coverage is available from the National Flood Insurance Program. You will discover, though, that these policies differ from homeowners’ policies in key ways. Homeowners’ coverage through NFIP starts the same day you purchase it, (actually,12:01 the next morning, but you know what we mean) however the flood insurance portion kicks in 30 days later. Maximum NFIP structure coverage tops out at a quarter million. Max personal property ends at $100,000. Flood coverage isn’t cheap and, for most of us, it is optional. But, people in a certified floodplain must, by law, purchase flood coverage. Find out here if that’s you.

Earthquakes: Californians have a special attitude about earthquakes. When the shaking stops they go on with the day. Tough crowd. Earthquakes are scary! But, scarier still is that our homeowners’ insurance does nothing for us in the event of an earthquake. You will need a ‘quake endorsement or completely separate policy with expensive premiums and high deductibles. In California, earthquake policies average $726 a year. Policy deductibles are 10-15% of the loss. Would you like more bad news? Your ‘quake insurance doesn’t cover flooding caused by an earthquake/tsunami. For that, you need separate flood coverage. “I rent. My renters’ policy will take care of me.” It won’t. Your renters’ policy includes neither personal property loss from earthquakes or living expenses while repairs are being made. Ask an insurance broker for information on renters/earthquake policies.

Will a natural disaster find you prepared? Check your coverages and hold your loved ones close. Courage, friends.