What Are Your Rights And Responsibilities If You Lose Your Home To A Natural Disaster (4 of 4)

 

Protecting yourself in the future

If you're not someone who was directly affected by Harvey or, not in the path of Irma, and has never experienced a catastrophic loss that triggered these types of issues, consider yourself lucky. And then place a call to your insurance agent to make sure you're properly covered should a natural disaster strike.

"Many factors will come together to determine what your home insurance policy will look like," said Total Mortgage. "Keep in mind that at the very least, you need to be protected against natural disasters that are common in your area. Speak to your insurance company to make sure you will have enough coverage if your home is destroyed, and don't be afraid to do your research: contact other companies, get quotes, and speak to multiple agents."

While it's hard to say that cost shouldn't be a consideration, scrimping on coverage is dangerous. "The biggest risk you may face if your home suffers major damage during a severe storm or tornado is being underinsured," said The Balance. "With changing costs of construction materials and labor, home insurance reconstruction costs have increased over the years. Although some policies do include the option for inflation adjustment, this is not sufficient to cover varying reconstruction costs. Take some time to verify the value your home is insured for. Then, be sure to inquire about what happens in a claim if your home is underinsured. Some policies include guaranteed replacement cost, however, the limit may be capped."

Your standard homeowner's insurance doesn't typically include earthquake protection. If you live on the West Coast or in a place where earthquakes are typical, this type of insurance may be required by your carrier. But those who are in other states that have been experiencing a higher number of earthquakes, like Texas and Oklahoma, may want to consider separate coverage, especially because building codes in these states may not protect against damage the way structure in California would. "In other regions, frequent seismic activity may come as a surprise," said NerdWallet. For example, Oklahoma - known primarily as a tornado hotbed - had the most earthquakes in the nation in 2015, likely due to an uptick in hydraulic fracturing, or fracking."