Do you have enough money in the bank to completely rebuild your home, pay off your mortgage, and replace all of your property? If not, keep reading.
What does my policy cover?
Just about every homeowner’s insurance policy covers fire, smoke, windstorms, lightning strikes, hail, explosions, vandalism, theft, and vehicle collision.
I don’t own a home so I don’t need to worry about it.
Unless you have the funds to replace everything you own, your belongings such as electronics, furniture, jewelry, and clothing need to be insured. Most apartments and landlords only have insurance to cover the actual dwelling; however, YOUR property is NOT typically covered by their policy. Most renters insurance policies offer protection for your belongings in case of power surges, water damage, fire, vandalism, and theft.
Great, I have a policy I am all set!
Not so fast, neither homeowners nor renters policies have coverage for floods or earthquakes.
Why do I need flood coverage? I don’t live by water.
You don’t need to live near water to experience flooding. More than 70% of flooding in Utah in the past few years has been outside the state’s Special Flood Hazard area. Flooding caused by storms, melting snow, hurricanes, and water backup due to inadequate or overloaded drainage systems and broken water mains from outside the home are not covered by most homeowners and renters policies.
Don’t wait for the weatherman to tell you it’s time.
Buy flood insurance before a flood happens, otherwise you won’t be covered. Flood insurance policies typically take 30 days to go into effect. If you wait to purchase a policy until after a flood event threatens or occurs, your property won’t be protected from the damage caused by that flood event.
How do I purchase flood insurance?
The agent who helps you with your homeowners or renters insurance may also be able to help you with purchasing flood insurance. If your insurance agent doesn’t sell flood insurance, you can contact the NFIP Help Center at 800-427-4661.
For more information:
- Flood Insurance in Utah
- The National Flood Insurance Program (NFIP)
- NFIP’s Flood Insurance Explainer Videos
What are the chances?
Earthquakes are impossible to predict and can cause major damage to your home and personal property. Earthquakes can occur at any time of year and any time of day. According to Earthquake Probabilities for the Wasatch Front Region in Utah, Idaho, and Wyoming there is a 43% chance of at least one large earthquake of magnitude 6.75 or greater occurring in the next 50 years. However, even small and moderate earthquakes can cause damage. About 500 earthquakes occur in the Wasatch Front region each year.
What does it cover?
Earthquake insurance covers repairs to your house, attached structures, your personal belongings, and additional living expenses. If you are a renter, you don’t need to worry about adding dwelling coverage.
What else do I need to know?
The deductible is an important consideration in earthquake insurance. It is a percentage of the dwelling coverage limit rather than a percentage of the amount of the loss. For example, a 5% deductible on a $100,000 policy would mean a deductible of $5,000 regardless of whether the loss was $20,000 or $100,000. In most cases, the base deductible is 5%, 10% or 20%. The deductibles are also unique in earthquake insurance because they apply to each coverage separately. For instance, if you have damage to your dwelling, damage to your personal property, and have loss of use, the deductible would apply separately for each of those three coverages. It is important to ask your insurer if they have one overall deductible or separate deductibles.
Don’t wait for tremors to start your policy!
For earthquake insurance, the waiting period is usually between 10 and 30 days. In addition, most insurers place a moratorium (a temporary suspension) on writing new earthquake coverage when there has been a recent earthquake in the area.
How do I purchase earthquake insurance?
To purchase earthquake insurance, you should start with your current homeowners or renters insurance agent. Earthquake insurance can be purchased as either a separate policy or an endorsement or rider to a traditional homeowner’s policy. If your current company does not write earthquake policies you may need to look to another company to purchase the policy.
For more information:
- Earthquake Probabilities for the Wasatch Front Region in Utah, Idaho, and Wyoming
- NAIC/InsureU Earthquake Disaster Prep Guide
So what do I do now?
- Take some time this week to review your policy.
- If you have questions or concerns, contact your local agent or your insurance company.
- Get the coverage you need and don’t wait until it is too late.