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What is Disaster Insurance For?

Written by AskTheLawyers.com™ on behalf of Steven Jones with Phillips Law Group.

What is Disaster Insurance For?
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Disaster insurance, sometimes referred to as “disaster risk” or “natural disaster” insurance, exists to cover the costs of damages which occur as a result of earthquakes, flooding, sinkholes, etc. Depending on where you live in the country and the natural disasters that tend to happen in that area, it may be recommended to add disaster insurance to your current homeowners insurance policy.

For example, California residents are often encouraged to purchase earthquake insurance due to the prevalence of earthquakes in that state. Similarly, insurance might be more expensive in areas that are more prone to natural disasters. To learn more about disaster insurance or for help filing or appealing a claim, reach out to an insurance law attorney.

Most home insurance policies cover a variety of severe weather but draw the line at natural disasters.

If you live in a place that is prone to flooding, earthquakes, sinkholes, or wind damage such as hurricanes, you may need to purchase an additional policy to protect yourself in the event of a disaster. While standard home insurance policies may cover damages that occur as the result of hail, lightning, and even wildfires, their coverage generally ends there. To learn exactly what kind of events you are currently covered for, reach out to your insurance provider to learn about your current coverage and additional policy options.

Disaster insurance may need to be purchased to cover damages in the following scenarios not typically covered by homeowner’s insurance:

  • Floods
  • Mudflows
  • Sinkholes
  • Earthquakes
  • Hail (primarily in the Great Plains states)
  • Tornadoes (primarily in locations where tornadoes are common)
  • Hurricanes (for coastal areas)
  • Damage from weight of ice, snow, or sleet
  • Vehicles damaged in a natural disaster

Some of these disasters such as hail, tornadoes, and hurricanes may be partially covered in a homeowner’s policy depending on the location; however, policyholders may want to consider purchasing additional insurance in these areas as the damages of these disasters tend to exceed that which the policy will cover.

It’s important to be on the lookout for insurance bad faith whenever filing a claim after a natural disaster or accident.

Insurance bad faith occurs when an insurance company unfairly denies or reduces a valid claim in the interest of profit. It is important to remember that insurance companies make their profit by accepting monthly payments from their policyholders and hanging on to as much of that money as possible. Insurance bad faith can be extremely financially damaging, unnecessarily increasing the financial stress on a family even after they have paid often expensive monthly premiums to protect themselves in case of a disaster.

Going through a disaster is distressing enough. If you have suffered as a result of a disaster covered by homeowner’s insurance, or if you have suffered a natural disaster covered by your disaster insurance policy, and suspect your insurance provider may be acting in bad faith, reach out to an insurance law attorney. Insurance bad faith is a serious allegation that should be addressed as soon as possible.

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