The average homeowner feels secure knowing they have insurance in the event of a severe weather calamity. Most people believe that no matter what happens, they have paid for protection against disaster.
Unfortunately, not every homeowners insurance policy provides full reimbursement from severe weather losses. Hurricanes, tornados, earthquakes and other rare catastrophes may not be covered under your current policy. Consider the impact of these extreme events and whether you are fully insured for the subsequent losses.
1: Hurricane Damage May Not Be Fully Covered
The recent national mobilization to deal with the fallout from Hurricane Florence highlights just how catastrophic severe weather can be to people and property. That being said, homeowners generally anticipate calling their insurance carrier to file a claim after returning home and assessing the damage.
It may come as a surprise, but many policies limit reimbursement to damage attributed to high winds. For example, a tree falls on a garage or vehicle and the insurance outfit writes a check.
But damage attributed to water can be tricky. Many policies do not cover flood insurance. That could mean that water backed up in the street or a stream, lake or pond overflowing into your home might not be covered. That’s why homeowners are advised to clarify water-related coverage.
2: Floods May Not Be Covered
People living near bodies of water may be required to carry flood insurance when applying for a mortgage. Flooding represents a high risk that can result in a total loss. Lenders are often apprehensive about approving mortgages for properties in so-called “floodplains.”
FEMA offers coverage through the National Flood Insurance Program. Homeowners living just outside a flood zone may not be required to buy additional coverage. However, you are taking a significant risk.
If your policy does not cover flooding, you could be on the hook for the full cost of the home’s repair or replacement. Considering the average flood insurance policy runs about $700, it may be worth the expense to protect your investment.
3: Tornado Insurance Coverage Can Be Murky
Although most policies cover damage from tornados, premiums can run higher in regions prone to these severe weather storms. But, like hurricanes, tornados that additionally bring about flooding can pose a problem for homeowners who make a claim. A carrier may conclude that the high wind and impact damage enjoys coverage. Water, however, can be a very gray area.
4: Earthquakes Often Not Covered
Like people who live in flood plains, earthquake riders may be required in certain areas of the country. Without additional coverage, the destruction caused by these catastrophic events may not be reimbursed. It’s imperative that people living in or around regions prone to earthquakes carry specific coverage. Imagine losing your home and still owing a monthly mortgage payment.
The important thing to glean from this overview about severe weather claims is that homeowners are wise to dig deep into their policies and have a clear, concise understanding about coverage. Keep in mind that water damage from flooding, rain and even sewer back-ups pose a significant threat to your home. For a few dollars more, enhanced severe weather insurance may be worth every penny.
Your trusted real estate professional is knowledgable about high and low risk properties. Be sure to utilize this valuable resource if you are in the market for a new property.
Last week’s economic releases included readings on the NAHB Housing Market Index, sales of pre-owned homes, and housing starts. Weekly readings on mortgage rates and first-time jobless claims were also released.
Robert Frost once wrote that “Good fences make good neighbors.” The poet was not referring to people bonding over the task of mending fences. Rather, defined boundaries are an important facet of neighborly relationships.
Home builder confidence in housing market conditions stayed flat in September. The National Association of Home Builders Housing Market Index reported an index reading of 67, which matched expectations and NAHB’s housing market reading for August. Analysts cited recent tariffs on building materials as a significant cause of easing builder confidence.
Temperate fall weather means it’s time to put summer vacations behind you and start planning for winter weather.
Fall is the time to get back into a comfortable routine, but it’s also a great time to incorporate social events into weekend work parties, and gather friends to offer neighbors a helping hand — or just moral support — to spruce up their property.