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Insurance for weather disasters

Insurance can be complicated. It is easy to select insurance and think you are covered for everything you need. Unfortunately, any holes in your coverage or failings of your insurance company’s customer service will be most apparent on the day that something goes wrong. These are the times when holes in your coverage can cost you a lot of money. It’s important to take the proper time with a trusted insurance agent to select the perfect plan for your needs.

 When shopping for insurance, here are four items to think about:

 Basic insurance is basic

 The most basic insurance policy will probably cover fire damage and not much else. It will most likely not cover hurricanes, septic issues, floods, and the like. It is important to consider your specific area, and the natural disasters and accidents that may occur there.

 Catastrophic weather events

 Recent weather patterns show that catastrophic weather events are becoming more powerful and damaging. Some types of storms may be happening in a wider geographic area. Certain types of catastrophes are happening in places where such events have not been common in the past. In terms of additional coverage, be sure to find out exactly what will and won’t be covered, and whether you’ll be able to retain the coverage over time. For example, the National Flood Insurance Program (NFIP) has a grandfathering policy when they change the flood maps. Such a grandfathering policy may allow you to purchase insurance for a certain weather event, even if coverage becomes unavailable in the future. Be aware of differences between coverage and differentiate between different coverage; for example, hurricane, flood, and sump pump failure are different riders. Or consider, if a storm causes a tree to fall, and the tree causes damage, how will those repairs be calculated under your plan?

 Are you self-insuring?

 One way to think about insurance premiums is that you are essentially self-insuring if you are not maintaining sufficient insurance. Landlords are responsible not only for the condition of the property, but potentially for injuries that occur on the property. Consider the competing costs of a court settlement and damages that may be incurred, or the cost of repairing serious damages in your home. It puts the cost of insurance premiums in perspective.

 Peace of mind has a value

 Appreciate that peace of mind, and not having to worry about catastrophic damage, has a value. Obviously if you have to file a damage claim you will still have worries, but knowing that you have an insurance plan to cover or help with costs can make a storm or accident easier to handle. When you think about it this way, the cost of insurance certainly adds value to you as a landlord. 

 When you are insuring your rental properties, you want to make sure to select the right coverage. Don’t assume that the first, most basic plan that you see will fit your needs. It is important to ask questions of a trusted insurance agent and think about all of the possibilities.

 


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