Three Big Catastrophe House Insurance Could Not Cowl – Motley Idiot
Many homeowners assume they are protected from disasters when they buy home insurance that covers their home and personal property. And while this applies to most things that can go wrong, there are some disasters that regular home insurance may not cover.
The usual household contents insurance almost without exception excludes damage caused by natural flooding. This can be confusing because when a house is flooded by a leaking or burst pipe, a problem with the refrigerator's plumbing, or a problem with the plumbing, this type of water damage is usually covered. But when nature causes a flood, insurance usually doesn't pay any damage.
Homeowners can take out separate flood insurance, usually from private insurers who offer specialized flood insurance. And homeowners in areas where flooding is most likely may be eligible for FEMA flood insurance, which is sold under the National Flood Insurance Program.
However, you must get flood insurance before a flood occurs. It is important for homeowners to check whether their insurance includes a flood exclusion and, if necessary, to take out insurance.
Surprisingly, there is no hurricane insurance. But the most likely impact a hurricane would have on a home is flooding and wind damage. Homeowner policies typically exclude flood damage from a hurricane, as it is also a natural flood rather than a burst pipe. Some guidelines also exclude storm wind damage.
Homeowners need to buy wind and flood protection if they live in a hurricane-prone area and don't want to be left uncovered in a severe storm. In most hurricane-prone states, it is possible to purchase coverage from private insurers who offer storm plans or through a government-administered plan such as the Texas Windstorm Insurance Association.
3. Forest fires
Fire is also included in most household insurance policies. However, in areas with a high risk of forest fire, insurance policies can exclude this protection. In this case, a homeowner would have coverage for some fires, such as those caused by a short circuit in the wiring. But they would not be protected from forest fire damage.
Here, too, homeowners can take out separate insurance cover for forest fires if their standard policy does not cover such events. Private insurers can offer this protection, as can government-sponsored insurance pools like the California FAIR plan.
Homeowners should research their coverage options – the government-sponsored insurance plans are often expensive, and flood, wind, and forest fires often have higher deductibles than standard insurance. Proper coverage, however, is crucial, especially if you live where these risks are higher.