The United States and the rest of the world are still experiencing widespread devastation as a result of climate change. Climate change disasters, according to Bill Gates, might become just as lethal as COVID-19. Since 22 incidents, including a record number of hurricanes and wildfires, cost over a billion dollars in damages together last year—the fifth warmest year on record—it is more crucial than ever to have natural disaster insurance. Will the fires and storms eventually stop? Never wager on it.
The fourth national climate assessment study from the US Global Change Research Program comes to the conclusion that climate change will only make billion-dollar disasters more frequent and more severe. For homeowners, this includes acting right away to safeguard your house, belongings, and financial assets. Depending on the disaster and where you reside, a typical homeowners insurance policy will protect your property against some natural disaster-related damages, but it won't cover all of them. You'll need to obtain additional coverage to offset costly repairs and rebuilding costs.
Ensure you have the appropriate insurance to safeguard your house.
The basic minimal level of protection for your house is provided by homeowner's insurance. Supplemental insurance might be required if you reside in a region that is vulnerable to natural catastrophes like wildfires, storms, or earthquakes. We'll go over the most frequent natural catastrophes that affect the US and show you how to reduce your financial risk by choosing the appropriate insurance coverage.
The Insurance Information Institute estimates that there will be 58,950 wildfires in the United States year 2020. Six of California's largest wildfires in recorded history damaged 10.1 million acres. A single fire in the counties of Napa and Sonoma cost 2.9 million dollars to repair. Although homeowners insurance frequently covers wildfire damage, companies have recently started canceling coverage in high-risk regions like California. Homeowners insurance cancellations are not permitted beginning in 2019 and running through the end of 2020. Another moratorium will soon be implemented to protect homeowners in high-risk zip codes from losing coverage as wildfires continue to rage across the state of California with a new state of emergency having been issued.
According to First Street Foundation, a nonprofit organization based in New York that conducts flood research, floods cost billions of dollars worth of losses every year, with $20 billion in damages anticipated this year. Additionally, between 2014 and 2018, 40% of all flood claims came from residences outside of high-risk flood zones. A typical homeowner's policy does not cover flood damage. You must purchase a separate flood insurance policy through the NFIP, a federally supported flood insurance program, or a private insurer in order to be protected from flooding. A standard NFIP flood insurance policy includes $100,000 in personal property coverage and $250,000 for the structure itself. Every new insurance has a 30-day waiting period before you can submit a claim.
There were 1,050 tornadoes in all in 2020, and they cost a record-breaking $36 billion in damages. Despite the fact that there were well over a thousand tornadoes across the US, only 14 tornadoes are responsible for about half of the $36 billion in damages. Hail or wind damage caused by tornadoes is often covered by homeowners insurance. However, if you reside in Tornado Alley, which includes Texas, Iowa, Kansas, Nebraska, or Ohio, you might also need to obtain windstorm coverage. Your home, possessions, and any other structures on your property are covered by windstorm insurance in case of wind or hail damage. However, it won't shield you from storm surges, water backups, or flood waters.
The year 2020 had many hurricanes. Total landfalls from 12 hurricanes caused $37 billion in losses. And the hurricane season in 2021 is already expected to be above average given that tropical storm Henri, the most recent storm, caused floods and power outages throughout the northeastern US. Although there isn't a specialized policy for hurricane damage, windstorm and flood insurance can frequently offer protection against hurricanes financially. Although there is no coverage for flood waters, many ordinary homes policies do provide some protection from wind damage from storms. However, if you reside in a region that is frequently struck by hurricanes, wind coverage might not be included in your standard homeowners policy.
One of the few natural calamities that is not in any way, shape, or form covered by a typical homeowners insurance policy is earthquakes. You need to get an earthquake coverage separately in order to be completely covered. Any damage that is a direct result of an earthquake is frequently covered by earthquake insurance, which can be acquired as a separate policy. Indirect damages like fire or water damage are not covered.
Other Natural Disasters
Volcanoes, tsunamis, mudflows, and sinkholes are additional less frequent natural catastrophes. The majority of homeowner insurance policies offer coverage for damage caused by volcanoes. However, this cannot be stated of tsunamis and sinkholes. You need flood insurance to shield your house from mudslides and tsunami damage. A separate sinkhole endorsement is necessary for sinkhole protection. About $300 million in losses result from sinkholes each year. You should talk to an agent about adding sinkhole coverage if you reside in one of the aforementioned states.
How to use natural disaster insurance
Following a natural disaster, you will submit a claim to recover any losses. Even though you can typically complete this process entirely online, talking to an agent can be useful. One of the worst things you can do is wait to file a claim, so be sure to do so as soon as possible once damages occur. Always file the day of or the day after a natural disaster, if at all possible. Another crucial step is to take a ton of photos and videos, as well as to hold off on tossing away damaged goods until an insurance adjuster visits your house, unless doing so could endanger your health. After being photographed, spoiled food, clothing, or bedding can all be thrown out.
After you submit a claim, an adjuster will often come to your house within 24 to 48 hours. It can take longer if several homes in your area were seriously damaged. No matter where they live, every homeowner should complete a house inventory list in advance to speed up the claims process. This is particularly more crucial if you reside in a disaster-prone area. Regularly, preferably once a year, catalog the state of expensive things with photographic evidence. In the event that your storage device is destroyed, you should also store your images in the cloud.