Some of the costs of owning a home, like routine maintenance, repairs, getting ready for the seasons, and improvements, can be overwhelming. Not to mention all the taxes, fees, and bills you have to pay every month. In an effort to save money, some homeowners wonder if they really need disaster insurance.
Most people think of disaster insurance as extra homeowner's insurance that covers things like hurricanes, tornadoes, earthquakes, and floods. Most homeowner's insurance plans cover hurricanes and tornadoes (review your policy to be certain in covers damage from such events). But most flood and earthquake damage isn't covered. If you want this extra insurance, you have to buy it on top of your standard homeowner's policy. Depending on where you live, it can be expensive.
Some homeowners choose not to buy disaster insurance because it can be expensive. But they are sometimes forced to buy. For example, through the US National Flood Insurance Program, people who have a mortgage on a home in a flood-risk area are required to buy flood insurance. Once the mortgages are paid off, there is no longer any need for this kind of insurance. But people who live in these areas should think carefully about whether they really want to take the chance that their house and everything in it could be swept away, leaving them with nothing but an empty lot. Even if a homeowner doesn't live in an area that is known to be at risk of flooding, they should still know that floods can cause plumbing problems like sewer and septic backups. Most standard homeowner's policies don't cover these, so they may want to think about getting an endorsement.
People in the US often think that earthquakes only happen along the west coast. This is not true, though, and earthquakes could happen in 39 US states. Coverage for earthquakes can be very expensive in California and other western states, but homeowners in other states should compare the cost to the earthquake risk in their area.
