Either way, you should review your homeowners insurance policy to ensure that it offers the right amount of coverage for your current needs.
If you live in a flood zone, you need special coverage. Unfortunately, your homeowners insurance does not have you covered here. You can, however, purchase flood insurance from the federal government through its National Flood Insurance Program.
The Federal Emergency Management Administration or FEMA routinely updates its flood maps to reflect local flood hazards. To find out if you are at risk, you can enter your information in a One-Step Flood Risk Profile. From there, you can determine if you should purchase flood insurance. You can buy insurance to cover your contents only, your building only or your building and contents.
Figure that your insurance premiums will rise following a natural disaster. That may happen whether you file a claim personally or not as insurers raise rates across the affected area. In 2012, homeowners insurance premiums crossed the $1,000 mark for the first time, averaging $1,004 per home. That is an increase of 22 percent over 2007, a faster pace than the rate of inflation.
You can manage your homeowners insurance costs by raising your premium or reducing your coverage. Following a disaster, either option may have zero appeal for you. Always buy the amount of insurance that you need and want as skimping on insurance will cost you when you need it the most.
In any case, when you review your policy, you should determine if you are receiving every discount due to you. Also, compare your policies over the past few years to see if the insurer changed your coverage. You would have received notification of the change, but you may not have paid it much attention.
It is also good to keep track of the health of your current insurance company. Reviewing financial data is not only boring, but it can hard for many people to decipher. And that is where several companies rate insurers, giving you details and ratings to help you learn how your company fares.
A.M. Best & Co. offers one of the oldest and best known rating services for banks and insurance companies alike. Fitch concentrates solely on insurance companies, and keeps a close eye on trends. Two others, Moody’s and Standard & Poor’s are useful, but can be accessed only by subscription. Read what these companies have to say and consider switching insurers if yours appears to be struggling.
Even if your area has not been affected by a natural disaster, there are two important changes that should also trigger a review of your coverage. The first, follows any major renovation that is done to your home. A new room, an updated kitchen, a deck, a swimming pool or anything else that adds value to your home should be reflected in your coverage. Second, if your home nows has a fire or burglary system in place, your insurer should be told about that too. Contact your insurance agent to discuss your current needs as well as your insurance options.
See Also — Is Your Homeowner’s Insurance Adequate?