FROM A DISASTER
HEALTH AND LIFE
*Adapted from information provided by the Federal Emergency Management Agency Mitigation Division at fema.gov.
TOP TEN QUESTIONS ABOUT INSURANCE
1. Are your valuables adequately covered?
Consider insuring jewelry, fine arts, guns, rugs, books, antiques, precious
metals, wine collections, coin collections and other high-price items.
2. Do you need travel insurance?
If you plan to travel out of the country in the next 12 months, does your
homeowners insurance carrier offer emergency travel insurance?
3. Do you need specified disaster coverage for floods, earthquakes
If you live in a high-risk area for a specific disaster, remember that these
events often are not covered in a standard homeowners policy.
4. Are your insurance policies accurate?
If personal assets are owned or held by a trust or limited liability company, are
those entities listed as a primary or additional party insured on your policies?
5. Do you need a personal umbrella/excess liability policy?
Consult your insurance agent to assess your vulnerability.
6. Do you need a guaranteed replacement cost policy?
If the replacement cost of your home exceeds $750,000, is it insured for
guaranteed replacement cost?
7. Does your homeowners policy include code upgrades?
If you have to make upgrades due to housing code changes, how will that
affect your policy?
8. Should you raise your deductible limits and increase your policy’s
Keep in mind that insurance is for catastrophe. Don’t overinsure at the low end.
9. Are your vehicles properly insured?
Automobiles worth in excess of $40,000 should be insured for an agreed
value, rather than their depreciated value.
10. Are recreational vehicles and watercraft properly insured?
Are these vehicles insured for both primary and excess liability?
FACTS ABOUT FLOOD INSURANCE*
Flooding is one of the most common causes of property damage. Flood insurance
can help minimize repair costs, but there are limitations to what is covered by a
typical policy. Here are the top things to know about flood insurance:
1. Everyone lives in a potential flood zone, but risk ranges from very high to
virtually nonexistent. Storms, melting snow, dam failures and overloaded
drainage systems all can cause flooding.
2. Flood damage is not covered by homeowners policies. This includes damage
from water that enters the home from outside, generally called groundwater.
(If, however, another factor such as wind is involved, the damage may be
covered. For example, if wind rips the roof off a home during a flood, any
water damage may be covered.)
3. You can buy flood insurance no matter what your flood risk is, but only if you
live in a “participating community,” which is defined as one that has adopted
and enforces floodplain management ordinances. To find out if you live in
a participating community, call your insurance agent, or visit fema.gov and
search for an agent who participates in a Write Your Own program.
4. Flood insurance can be affordable — about 90 private insurance companies
nationally offer affordable flood insurance backed by the federal government.
5. A policy for homes in low- to moderate-risk areas costs about $120 per year.
For more information, visit fema.gov.
6. Renters can insure their belongings through separate contents coverage.
7. Up to $1 million of flood insurance coverage is available for nonresidential
buildings; $500,000 for its contents. This means that $500,000 is set aside
for the nonresidential building and $500,000 for its contents. For residential
buildings, the limit is $250,000. You can, however, obtain separate policies for
8. There usually is a 30-day waiting period before the coverage goes into effect.
9. Federal disaster assistance is not a substitute for insurance. This assistance
only is available if the president declares a disaster (based on the extent and
severity of damages due to a specific event). Flood insurance pays even if a
disaster is not declared.
CHAPTER 2: PROTECTING YOUR PROPERTY | 14