How To Obtain Disaster Insurance

Disasters occur without any warning. An earthquake can occur without as much as a notification letter of its occurrence. A fire can eat up, or a flash flood can wash away, all of your properties - and they will never warn you in advance. Surely, you can prepare for such disasters. Disasters, whether naturally occurring or borne of human fault or negligence, are not only emotionally terrifying - they can also be financially very debilitating. One way to prepare for the financial devastation that you might have to go through after a disaster strikes you is to get disaster insurance.

To be able to decide smartly on disaster insurance, you need to be familiar with your geographic location, your financial condition, and how much risk you can comfortably take.

Why do you need to be familiar with your geographic location? Some areas are prone to particular types of natural calamities while others aren’t. For example, if your house sits right on top of an earthquake fault, you can expect the ground to shake at any time and bring down all or part of your house. Another example is the coastal areas - these are frequently visited by hurricanes. Floods, of course, can occur almost anywhere, but those who live near dams or rivers are at bigger risk of experiencing disastrous floods. Knowing the risks inherent in your geographic location can help you assess the gravity of the risk and can greatly help you decide on which insurance coverage you would like to obtain—or whether you want insurance coverage for a particular risk at all.

The next thing you need to consider is your financial condition. It only takes one earthquake to bring down your house - along with your furniture, appliances, and other properties inside it. Do you have enough money set aside to rebuild your home on your own after the disaster? If not, you might want to get insured. On the one hand, insurance helps you pay for rebuilding or recovering after disaster strikes you. On the other hand, insurance costs you money because you will have to pay premiums for the insurance coverage. Take note also that the prices of insurance coverage are higher where the risks are higher. Also examine the coverage of your insurance. Some insurance companies include coverage protection for unattached residential garages and home contents. Another important thing you need to find out from your insurance company is not only how much you need to pay but also for how long you need to pay regularly before you are completely covered or insured.

Be careful, too, about “All Perils” provisions. In most cases, an “All Perils” coverage is, in fact, just a “some perils excluded” provision and won’t be covering everything. It sounds very tempting, though - blanket coverage for all kinds of dangers. To be safe, always read and understand the coverage provisions - including the fine print and exclusion provisions.

Whether you like it or not, obtaining disaster insurance always makes perfect sense. But, you can smartly forgo insurance coverage for some types of perils that you or your home may not be at high risk of encountering. Although, in general, getting disaster insurance is a sensible decision, some types of coverage are just not worth the additional cost.


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