Your home is probably your biggest asset to date. Though a home insurance is not required by law, some mortgage companies demand that you get one before they can give you the mortgage. Whether by choice or because of a mortgage deal, you find yourself needing one. Now you are wondering whether your policy is giving you enough coverage.
Are You Covered?
A standard home insurance policy typically covers the dwelling and the area it stands on, any fence and shed, yourself and your family as well as third party injuries at your premises. It further includes fires and fallen trees.
Most policies do not however cover flooding outside the home or natural disasters such as earthquakes. For such acts of nature, you will need to take additional cover.
Are You at Risk?
But first you need to ask yourself whether you need such a cover. Is your area prone to flooding for example? Areas prone to flooding are zoned by FEMA (Federal Emergency Management Agency) and categorized as low risk, moderate to low risk, high risk and undetermined risk.
People living in high risk zones are required by law to obtain a flooding insurance. Even if you do not live in a flood or disaster prone area, you should consider taking the policy. According to FEMA, 20% of flood-related claims come from people living in non-high risk zones.
Can You Afford it?
As far as the cost is concerned, flood insurance is only issued by The Natural Flood Insurance Program (NFIP) so you cannot shop around for better rates. Prices are fixed according to your homes' particulars and not across insurance agencies.
The rule of thumb though is that a home insurance should cover the cost of rebuilding your home. Have your home value estimated by a home builder as this is what will determine how much you have to pay. That gives you the replacement cost. Then if you are in a flood prone zone, you could get a flood
Standard home insurance policies will cover you for fire-related disasters but not against things like flooding or earthquakes. For these added risks to your home, you'll need to assess your level of risk, and then if you deem it fit, take additional cover. Even if you are not at high risk, you are better off taking extra cover if you can afford it because stuff happens.
For more information, contact companies like Willie Swims Ins Agency, Inc.Share