Natural and unnatural disasters affect everyone. Some areas of the United States are so prone to natural disturbances that many private insurance companies will not offer coverage. For example, most homeowners insurance will not cover damage caused by floods or earthquakes, and few will cover forest fires if your property is in an undeveloped area.
When evaluating what kind of insurance coverage you need, consider what your current policy covers, any inexpensive additions (or endorsements) to your active policy and your location related to the risk of natural disaster.
There are many types of disasters to consider, including natural disasters like floods, earthquakes, forest fires, tornadoes and hurricanes. Unnatural disasters include war, nuclear accidents, civil disobedience and terrorism.
NATURAL DISASTERS
Floods
Who is at risk? Everyone. Any area can experience an unusually wet season and the wastewater management systems of most cities do not have the means to control a rapid increase of water in paved areas. Generally, if your property lies near a body of water or in an area prone to hurricanes or flash floods the National Flood Insurance Program (NFIP) considers you to be at a high risk.
To determine the level of risk in your area: Visit http://www.floodsmart.com, sponsored by the NFIP, to see floodplain maps and search by zip code the flood risk of a specific area.
Insurance: Traditional homeowners insurance does not cover flooding. Many lenders require flood insurance if the property is located in a high-risk area. Private agencies do not provide flood insurance; flood insurance is available through the NFIP, who is under FEMA and the Department of Homeland Security. Information about this insurance program is available at the NFIP website or through an insurance quote service. Flood insurance offered by the NFIP usually also covers flooding caused by hurricanes, rivers and tidal waves if two acres or two adjacent properties are affected. Water damage from broken pipes, backed-up sewers and from fire hoses is usually covered by standard insurance.
Earthquakes
Who is at risk? In the United States, the most active areas are along the Pacific Ocean including Alaska, Hawaii, California, Oregon and Washington. Inland areas of activity include Nevada, Utah, Idaho, Wyoming, and a small area between the three connecting corners of Arkansas, Tennessee and Missouri.
To determine the level of risk in your area: The United States Geological Society Earthquakes Hazards Program hosts maps at [http://wwwneic.cr.usgs.gov/neis/epic/epic_circ.html] that are updated by the hour for the entire planet. Residents of California can go to [http://www.quake.abag.ca.gov] to view an interactive shaking and liquefaction map.
Insurance: Earthquake endorsements can be added to most insurance policies purchased through a private agency. In California, residents can purchase earthquake insurance through the California Earthquake Authority. The probability of an earthquake, your location, soil type and building structure determine premiums. Deductibles on earthquake insurance are typically very high, often up to 10 to 15 percent of the building's structural limit. Damage caused by broken gas lines or water pipes as a result of an earthquake typically may be covered by standard insurance. Earthquake damage to vehicles is covered by comprehensive insurance. Liquefaction can cause water damage by mud and standing water resulting from an earthquake. Consult your policy to determine whether your earthquake endorsement or other additions cover this type of phenomenon.
Forest Fires
Who is at Risk? Properties in wooded or dry grassland areas or located far from fire stations are considered at risk.
To determine the level of risk in your area: The National Interagency Fire Center publishes current fire maps at [http://www.nifc.gov/firemaps.html].
Insurance: It is quite common for insurance companies to refuse coverage for properties in wooded areas or far from fire stations. Fortunately, unless you are in certain high-risk areas, many agencies will offer coverage or endorsements. Some policies offer benefits to help clean smoke damage and cover accidental fires or lightening fires in developed areas. Many insurance companies will extend discounts if preventative products are in place, including fire alarms or sprinklers, fire extinguishers and fire-resistant roofs.
Tornadoes
Who is at Risk? Tornadoes are most common in the states located east of the Rockies. However, they occasionally do occur in other areas.
To determine the level of risk in your area: The National Climatic Data Center tracks severe weather. To view maps and historical information related to tornadoes visit http://www.ncdc.noaa.gov/oa/climate/severeweather/tornadoes.html.
Insurance: Coverage for this type of disaster is usually available through a standard insurance policy. Most policies will also cover structural damage from hail that quite often accompanies this type of weather. Damage to trees and landscaping is not usually covered unless an addition is purchased.
Hurricanes
Who is at Risk? Hurricanes occur most often over and near the Atlantic Ocean, Gulf of Mexico, Indian Ocean, Caribbean Sea and Pacific Ocean. In the United States areas surrounding the Gulf of Mexico and along the eastern coastlines of Florida to Maine are particularly prone to this type of severe weather.
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