How to Obtain Disaster Insurance

Hurricanes, floods and earthquakes: If you're a home owner, these calamitous events are justifiably unnerving. The good news is your insurance probably already covers you for hurricanes. You'll have to add protection against earthquakes and floods on your own. And if you live in shaky territory or near a river, that can be costly.

Instructions

Difficulty: Moderately Easy

1. Check your home owner's insurance to see precisely what it covers. It's likely you won't need to add anything for hurricane protection, since policies usually cover damage from wind and rain. In hurricane-prone areas of Florida, however, it can cost nearly $3,000 to protect a home worth $300,000. It all depends on the location and the corresponding risk.
2. Buy flood insurance if you live in an area prone to flooding. Obtained through the National Flood Insurance Program (www.fema.gov/nfip), flood insurance covers up to $250,000 for a single-family home and up to $100,000 for its contents. You may not have a choice in the matter. If you have a mortgage and live in a designated Special Flood Hazard Area, federal regulations require you to have flood insurance.
3. Evaluate whether you need earthquake insurance. Few home owner's policies cover earthquakes, which means it's up to you to get it.
4. Don't assume you're safe outside of California. It's no surprise that California leads the list in earthquakes, followed by Washington, Oregon, Nevada and Arizona. But 39 states have a medium to high potential for quakes, and roughly 90 percent of all Americans live in areas considered seismically active.
5. Contact your state. For instance, the California Earthquake Authority (CEA, earthquakeauthority.com) sells earthquake insurance to state residents. Get details on what the earthquake insurance covers. A solid policy covers the cost of replacing or repairing any property damaged in a quake.
6. Be prepared to pay a sizable premium, depending on where you live. For instance, the CEA offers $75,000 of earthquake coverage on a $500,000 house for more than $2,000 per year.
7. Check out other options, including the protection of nonattached garages, coverage of the contents of your home, and the size of the deductible you pay before coverage applies.
8. Consider full replacement coverage. Depending on where you live, this could add a couple hundred dollars to your premium.

What to Look For:

• Existing home owners' coverage
• Local insurance requirements
• State-provided earthquake insurance
• Replacement coverage

Tips & Warnings

• The cost of earthquake coverage varies greatly, and you can expect to pay more for a brick house (they don't handle earthquake stress as well as wood structures). Also, the older your home, the more expensive your coverage will be.
• Ask your insurance agent for recommended actions you can take to reduce the damage from a natural disaster, such as reinforcing the roof, adding storm shutters, or retrofitting the foundation.
• Factor in federal assistance from federal agencies like FEMA, which provide disaster relief.
• Floods and storms can cause sewer, septic and drain backups, which are not covered by most home owner's policies. Get an extra rider if you believe your home is at risk. At a cost of approximately $20 to $40 a year, it could be well worth it if a particularly rainy season causes costly backups.