On August 23, 2011, Virginia experienced a 5.8 magnitude earthquake that was felt as far north as Portland, Maine and as far south as Anderson, S.C. Just a few days later, hurricane Irene pummeled many states along the Eastern Seaboard. Locally in north Georgia, Cobb and Cherokee county were hit by tornados that spawned from tropical storm Lee on September 4.
It is not signaling the end of the world, but natural disasters happen and leave damage and destruction in their wake. Increasingly, homeowners are left to foot the bills as insurance companies have started to pass more of the costs of natural disasters to policy holders. It is estimated that Irene created 100,000 insurance claims covering as much as $4 billion in damages.
Unfortunately, homeowners are beginning to see their premiums increase. Flood insurance is not mandatory unless you live in a high risk flood zone. But without a specific flood insurance policy, your damages will not be covered by your homeowner’s insurance policy. Property owners in coastal areas may find that their policies have mandatory wind or hurricane deductibles. However, even with such a deductible, policies may not cover all the damage. Generally a homeowner’s insurance policy covers damage from wind. After Irene’s 90-mile-per-hour winds ripped through the Atlantic shorelines, it is difficult to tell what damage was from wind and what damage came from rising water or storm surge.
At Henssler Financial, we suggest you meet with your insurance provider to review your coverage before a disaster strikes. As the owner of your property, you generally know how water flows when it rains. If we were to experience rains like we did in 2009, would your home be in danger? While you may not live in a flood plain, we feel if you have a $300,000 or $400,000 home, the cost of purchasing flood insurance “just in case” far outweighs the risk of $40,000 worth of uncovered damage. Additionally, when reviewing your coverage with your insurance provider, report any home improvements you have made, otherwise you risk being underinsured.
If you do suffer damage from a natural disaster, your best course of action is to first prevent any more damage from happening. This may include making temporary repairs prior to a visit from your adjuster. Document the damage with pictures, and keep receipts for any repairs you make and lodging expenses if your house is uninhabitable. If your neighborhood or region is severely damaged, it may take a week or longer for an adjuster to visit your property. We suggest using that time to obtain estimates from trusted contractors. These can be used as a guide when working with the adjuster, and can give you an idea of the repairs needed to avoid long-term damage to your home.
If your insurance company denies your claim or offers little coverage, you have the right to ask to see the language in your policy that served as the basis for denying the claim. If you still feel you are being treated unfairly, you should contact the senior staff at the insurance company or your state regulators.
At Henssler Financial we believe you should Live Ready, and that includes fully understand the limits of your homeowner’s coverage. We feel homeowners and families should talk about disaster plans and create an emergency contact list that includes contractors, insurance claim line, family, business contacts, and utility service providers (to cut electricity or water). If you have questions regarding your insurance coverage for natural disasters the experts at Henssler Financial will be glad to help. You may call our experts at 770-429-9166 or e-mail at experts@henssler.com.
Disclosures
This article is meant to provide valuable background information on particular investments, NOT a recommendation to buy. The investments referenced within this article may currently be traded by Henssler Financial. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. The contents are intended for general information purposes only. Information provided should not be the sole basis in making any decisions and is not intended to replace the advice of a qualified professional, such as a tax consultant, insurance adviser or attorney. Although this material is designed to provide accurate and authoritative information with respect to the subject matter, it may not apply in all situations. Readers are urged to consult with their adviser concerning specific situations and questions. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments, there are associated inherent risks. Please obtain and review all financial material carefully before investing. Henssler is not licensed to offer or sell insurance products, and this overview is not to be construed as an offer to purchase any insurance products.
