Even though you may be adequately prepared for a disaster, you may still suffer significant damage to your property. This is why renters or homeowners insurance is so important. Yet many people affected by disasters have been under insured, or not insured at all. Make sure the insurance you buy protects against the hazards you may face.
- At minimum, buy full replacement or replacement cost coverage. This means the structure can be replaced up to the limits specified in the policy.
- Investigate buying a guaranteed replacement cost policy. When and where available, these policies can pay to rebuild your house, including improvements, at today's prices, regardless of the limits of the policy.
- Periodically, have your home reappraised to be sure the policy reflects the real replacement cost.
- Update your policy that covers the replacement cost of your possessions. Standard coverage only pays for the actual cash value (replacement cost discounted for age or use).
- Be very clear about what the policy will and will not cover, and how the deductibles work (the part you pay before the policy pays).
- Check state operated or federally operated insurance pools if you find it difficult to obtain private coverage because of a recent disaster. Premiums often run higher than market rates, but is better than no coverage.
- Conduct a home inventory, make a list, and use it to check that your policy's coverage matches the value of your possessions.