Are You Covered for the Next Natural Disaster?

Make sure you have the right insurance to protect you from nature’s wrath.

Federal weather forecasts have predicted a “near normal” number of hurricanes for the season that ends November 30. That’s small consolation, though, if you find yourself in the path of one of the nine to 15 named storms predicted to form in the Atlantic this year. And elsewhere in the U.S., other types of natural disasters, from wildfires to floods, continue to inflict billions of dollars in damage to homes and businesses.

You can’t control Mother Nature, but you can protect your property. Start by understanding what your homeowners insurance will—and won’t—cover.

Damage caused by wind, wind-driven rain, and water that comes in your home through the roof, windows or doors is usually covered by your homeowners insurance policy. But your policy won’t cover water that comes from the ground up. For that, you need flood insurance. You should consider purchasing this insurance even if you don’t live in a designated flood zone, says Mark Hanna, of the Insurance Council of Texas.

“Everyone should consider flood insurance, unless they’re living at the top of a hill,” Hanna says. Even if you’ve escaped flooding in the past, “there are so many different ways your home can flood,” he says. “Your neighbors could make changes to their landscaping and the next torrent of water could come right toward your house.”

You can buy insurance from the Federal Emergency Management Agency’s National Flood Insurance Program. The average cost is $699 per year, but higher-risk areas can cost much more (see for details). There’s a 30-day waiting period for NFIP coverage to take effect, so don’t wait for the water to start rising before you purchase a policy.

The maximum amount of coverage you can buy from the NFIP is $250,000 for your dwelling and $100,000 for the contents of your home. If your home is worth much more than that, talk to an insurance agent about private coverage. Private policies tend to have higher limits and may cost less than NFIP coverage, depending on where you live.

Coming up short. Most homeowners policies cover damage from tornadoes and wildfires (but not earthquakes, for which you need a separate policy). Still, your insurance may not cover the cost of rebuilding your home. For that, you’ll probably need extended replacement-cost coverage, which typically pays 25% to 50% above your policy’s limits. The extra coverage can protect you from big increases in the costs of labor and materials after a disaster.

That’s what happened after last year’s wildfires on the West Coast, says Derek Ross, an independent insurance agent who had to evacuate his Oak Park, Calif., home during last November’s wildfires. (His home wasn’t affected, but some nearby properties were destroyed.) “There is a limited number of contractors when you have big disasters,” he says. “On the West Coast now, the costs to rebuild are exorbitant.”

As far as the contents of your home are concerned, an inventory of your belongings will speed up the claims process. A smartphone app such as Sortly will help you create an inventory. Or, you can conduct a room-by-room narrated video of your belongings. Keep a record of serial numbers for appliances and electronic equipment. Don’t overlook offsite belongings, such as items kept in a storage facility, because they’re usually covered by your homeowners insurance, too.

Most Popular

Don’t Be Tricked Into Voluntarily Paying Higher Taxes on Your IRA

Don’t Be Tricked Into Voluntarily Paying Higher Taxes on Your IRA

Traditional IRAs are set up in a way that basically incentivizes you (and your heirs) into paying the highest tax bill possible. Don’t fall for it. Co…
July 4, 2022
Your Guide to Roth Conversions
Special Report
Tax Breaks

Your Guide to Roth Conversions

A Kiplinger Special Report
February 25, 2021
The 15 Best Stocks for the Rest of 2022
stocks to buy

The 15 Best Stocks for the Rest of 2022

The lesson of the past two years: Be ready for anything. Our 15 best stocks to buy for the rest of 2022 reflect several possible outcomes for the seco…
June 21, 2022


Homeowners Insurance: How to Protect Your Home
Brandon Copeland

Homeowners Insurance: How to Protect Your Home

NFL linebacker and Kiplinger contributing editor Brandon Copeland discusses the ins and outs of homeowners insurance.
June 8, 2022
Short-Term Insurance Plans' Good, Bad and Ugly

Short-Term Insurance Plans' Good, Bad and Ugly

You'll need a clear-eyed analysis to gauge the value of short-term care insurance plans and if they're right for you.
May 26, 2022
Things You’ll Regret Keeping in a Safe Deposit Box

Things You’ll Regret Keeping in a Safe Deposit Box

Locking up certain important documents and valuables in a bank vault could turn into a headache for you or your heirs.
May 18, 2022
7 Things Medicare Doesn’t Cover
Healthy Living on a Budget

7 Things Medicare Doesn’t Cover

Medicare Part A and Part B leave some pretty significant gaps in your health-care coverage. But Medicare Advantage has problems, too.
May 4, 2022