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Definition of Catastrophe Insurance

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You could face
financial ruin if you needed it but didn’t have catastrophe insurance.
Having disaster
insurance coverage to mitigate the effects of a loss is not only a smart move,
but is also a requirement of lending institutions like banks and credit unions.
Insurers are the backbone of modern civilization. You couldn’t get a mortgage
to buy a house or a car, or in some cases, a business loan without insurance.
 

Home Insurance

 
Your home insurance
will cover a multitude of things that can happen to your home, including fires,
burglaries, etc. Structure and content are covered. Since there are as many if
not more losses that you also won’t have coverage for, it’s important to take
the time to read your policy and understand what is excluded.
 

Tenant insurance

 
I’m willing to bet
you that if you ask people you know who rent if they have tenant insurance,
most will say no.
 
Renters insurance is
probably the “best buy for the money” when it comes to insurance. For an annual
payment that’s probably less than a week’s pay, most tenants can purchase
tenant insurance and enjoy the peace of mind of knowing their furniture,
clothing, and other personal effects are covered.
 
Let me wholeheartedly
encourage you to take out tenant insurance and if you are a landlord renting
out part of your house, you should encourage your tenant to purchase tenant
insurance.
 
Check with your
lawyer if you can require tenant insurance as a condition of renting or renting
your house or apartment. It is so important.
 

Homeowner flood
insurance

 
Flooding is caused by
rising waters and should not be confused with water damage caused by roof leaks
or wind rains. Also, remember that the president does not have to declare a
disaster in order for you to claim payment for your flood policy.
Flooding is not
covered by your landlord’s policy and if you want flood coverage you will need
to purchase a flood insurance policy.
 
When shopping for a
home, it’s a good idea to do some research on the area in which you plan to
purchase your home to see if it is in a flood zone.
 
While you don’t need
to be in a flood zone to purchase flood insurance, the cost will be much higher
if you are in a flood plain otherwise known as a “flood risk zone” (SFHA).
 
Your insurance agent
can look at the flood map to see if your area is in a high risk, medium risk,
or low risk area.
 
The maximum amount of
coverage you can buy for your home is $ 250,000 and its contents are $ 100,000.
It will be different if it is a two-family house. Will it be enough to rebuild
your house if it was washed away by a flood? Take this into account when
shopping for the home of your dreams.
 

Flood insurance for
tenants

 
Just as tenant
insurance will give you peace of mind for you and your family, know that it
does not cover flooding, and your landlord’s flood policy does not cover your
belongings either.
 
Take my advice and
buy flood insurance as well, it is inexpensive and will be one of your best
buys. The maximum you can buy is $ 100,000 and will give you peace of mind
knowing that there will be financial help for you if you have a loss …
Hurricane catastrophe
insurance:
 
Most, if not all,
insurance companies will include a very large deductible in your homeowner’s
policy for hurricane damage. This is usually a percentage of the amount of your
insurance coverage on your home and ranges from 3% to 7%.
Here’s an example:
let’s say your home is insured for $ 200,000. Your deductible is 5% ($ 10,000),
hurricane damage to your home is $ 50,000. You will only be paid $ 40,000.
 
Can you afford a $
10,000 deductible to repair your home if it has been damaged? What if the
damage was less than your deductible? You will not be paid anything by your
insurance company. Your disaster insurance emergency fund should be an amount
at least equal to your deductible but definitely recommended to be more.
 

Earthquake insurance

 
Do you live in an
area known to have earthquakes? If this is the case, your catastrophe insurance
plans should include earthquake insurance. Be aware that your home insurance
policy will not cover you in the event of an earthquake.
Many insurance
companies offer special “earthquake insurance” and although coverage is not
mandatory unless your lender requires it, the deductible can go up to 15% and
sometimes more. This is important to know when shopping for a home when setting
your home maintenance budget.
Tornado insurance:
 

Insurance

 
It is the most
devastating of all natural disasters. Tornadoes can tear apart a neighborhood
like a chipper, leaving nothing but unrecognizable rubble. Unfortunately, there
is no “tornado insurance” available. You will need to rely on your home
insurance to cover you.
 
I have spent time on
flood, hurricane, and earthquake insurance as these are the most common natural
disasters. However, this is by no means to ignore the many other natural
disasters you might be exposed to if you live in such areas.
Talk to your
insurance company or agent about the extent to which you are covered and
whether a mandatory deductible applies to a claim for damage to your home.
Having spent some
time as an insurance agent and also as a real estate agent, I would caution my
clients about the importance of proper insurance. As a real estate agent, I
would remind them as much as I remind you that before you buy “Think how
easy or difficult it would be to sell your house if it is in an area known for
a particular type of disaster.”
 
You could face
financial ruin if you needed it but didn’t have catastrophe insurance.
Having the right
equipment on hand will also help you with your preparations.

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