Finance

So You Think You’re Covered

Posted: 1/7/2012

Every homeowner should consider flood insurance, even those not in Special Flood Hazard Areas.

(NAPSI)—Sometimes it seems like the news just keeps repeating itself: Another natural disaster is right around the corner. Fortunately, there are things you can do to protect your property.

Take a Close Look

Some homeowners take comfort in believing that if their dwelling is struck, their insurance will cover all or most of the damage. The trouble is—that may not be true.

Homeowners insurance policies are complex documents. Premiums are paid to cover what is written in black and white-nothing less but nothing more, either. So, nothing should be assumed by the policyholders. For example, it’s erroneous to think earthquake damage would be covered unless the policy specifically says so.

What to Do Next

Since standard homeowners policies don’t cover it, an earthquake addendum, often called an endorsement, would be necessary—or perhaps a separate earthquake policy altogether.

Another example: When rivers and streams run amok because of violent tropical storms, homeowners inadequately protected by their insurance can be left both soggy and sorry.

Expert Advice

David Thompson, CPCU, an instructor with the Florida Association of Insurance Agents, counsels preparation. “I’d encourage everyone to read their insurance policies and speak with their agent or broker about the coverage provided,” said Thompson. “When it comes to natural disasters related to hurricanes, consumers are always best off to have both a homeowner’s policy and a flood policy. Since about 25 percent of flood losses take place outside of a Special Flood Hazard Area, everyone should consider purchasing flood insurance.”

Who Can Help

Adequate homeowner protection can be secured from an agent or broker whose name is followed by CPCU. Those letters mean the individual has passed a series of difficult industry exams related to property and casualty insurance, is experienced in the field and is committed to a tough and enforced code of ethics.

To find one nearby, visit www.cpcusociety.org, click Consumers and then click Find An Agent/Broker in the left-hand margin or call (800) 932-2728.