How to Get Insurance Protection Against Natural Disasters

Three Methods:Getting Flood InsuranceGetting Earthquake InsuranceComparing Insurers

When natural disaster strikes, sometimes the magnitude of the disaster makes it difficult to appreciate the devastation it visits on an individual homeowner or renter. No one wants to awaken the morning after a disaster to find all their worldly possessions destroyed and without insurance to replace them. In the short term, purchasing insurance against natural disasters can be a very easy thing to put off, and it seems like a homeowner’s policy should cover against natural disasters anyway. While that’s true of wildfires and tornadoes, damage from earthquakes, landslides, and floods is not covered. If you live in an area that’s at high risk for any of the above disasters, purchasing flood or earthquake insurance is crucial.

Method 1
Getting Flood Insurance

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    Go to the National Flood Insurance Program’s website. Located at, the National Flood Insurance Program is the place to start your search for flood insurance. There you can learn about flood insurance in general, determine the risk of flooding in your area, and even find local agents who sell flood insurance.
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    Determine the level of risk in your area. You can find out what the risk profile for your property is right on the homepage of All you have to do is enter your address—it will tell you the level of risk for your address and your annual premium.[1]
    • If you live in a high-risk area, it means there’s at least a 25% chance of a flood occurring during the lifetime of a thirty year mortgage. If you live in a high risk area and have a federally-backed mortgage, flood insurance is mandatory.
    • Although mortgagors in lower risk areas are not required to purchase flood insurance, flood damage from those areas represents over 20% of all claims and 30% of all disaster assistance.
    • If you would like to view a map of the flood risk in your area, go to and enter in your address.
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    Make sure you know what’s covered. There are two basic types of flood insurance, structural insurance and contents-insurance. Structures are insured up to $250,000 and contents are insured up to $100,000.[2]
    • Structural insurance covers the actual home itself, including the foundation, walls, roof, heavy appliances, flooring, electrical and plumbing systems, and HVAC systems.
    • Contents-insurance covers what is inside the home, such as your personal belongings, washers and dryers, artwork up to $2,500, window AC units, dishwashers, and microwaves.
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    Pick a reasonable deductible. The standard deductible for flood insurance is $500 for new homes and $1,000 for older homes. That deductible applies separately to the coverage on the structure and the coverage of the contents of the home. You can pick a higher deductible (up to $5,000) in an effort to lower your monthly payment. Remember though, a higher deductible isn’t really saving you money in the sense of you getting more for paying less. All the higher deductible does is obligate you to pay more out of pocket when disaster strikes.[3]
    • If you’re tempted to opt for a larger deductible, think long and hard about it. The average flood insurance claim is $30,000, and in the event of a major disaster, can be much higher. A major flood might destroy your home, but it can also devastate your entire region. If you’re out of work and your bank has been destroyed right along with your home, paying the extra $$4,500 might be much more difficult than it sounds.
    • Making adjustments to the deductible is the primary way people influence their monthly flood insurance payments. Premiums are otherwise determined by the National Flood Insurance Program; the insurance carriers don’t influence the price one way or the other.
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    Retrofit your home. There are several renovations you can make to help flood-proof your home, and most of them will lower your premium. Some of these can be quite expensive, so they might not pay for themselves for several years. Nonetheless, you might find it’s worth it to go ahead and get the renovations. They will save you from damage, and not having to go through the hassle of repairing damage can be it’s own reward.[4]
    • Some of these renovations include elevating your home, elevating your furnace or your AC unit, moving outlets higher up on the walls, and moving your circuit breaker to a higher floor.
    • If you do elevate your home, make sure to get the elevation certified. Elevation certificates can be purchased from architects or land surveyors in your area. To find a surveyor, go to the website of your state association of surveyors and find one in your area.[5]
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    Speak with an agent. The National Flood Insurance program has a directory of agents selling flood insurance in your area. In order to purchase a policy, simply go to and enter your address, then speak with an agent near you.[6]
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    Consider excess flood insurance. Flood insurance beyond what’s available through the National Flood Insurance Program is both pricey and hard to come by (imagine a premium of $12,000 per year for 2.5 million in coverage). However, it is available for purchase on the private market from select insurers. Some of the larger insurers offering excess flood insurance coverage include AIG, Fireman’s Fund, and Lloyd’s of London.[7]

Method 2
Getting Earthquake Insurance

  1. 1
    Find a carrier. Before you can decide on a policy, you’ll have to find an insurance carrier. This is easiest on the West coast. In California, where the risk of earthquake is greatest, earthquake insurance is sold through the California Earthquake Authority (CEA). In addition, GeoVera and Arrowhead sell earthquake insurance to residents along the entire Pacific Coast.[8]
    • If you don’t live on the West Coast, ask your home insurer about earthquake insurance. Most of the larger carriers will offer it, and those that don’t will be able to point you in the right direction.
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    Make sure you know how coverage is itemized and what is covered. In most policies, different limits are applied to personal property coverage, living expenses, and coverage for structural damage. People often try to save money by skimping on personal property coverage, which starts out at about $5,000. Only you know how much your property is worth, but be sure you aren’t significantly underinsuring yourself. [9]
    • Watch out for items like stock certificates, cash, and art. Most policies limit the coverage of collectibles, and don’t cover high ticket items like crystal and china at all.
    • Additional living expenses (ALE) covers temporary expenses like hotel rooms you might have if an earthquake rendered your home unlivable. Basic plans start out with just $1,500 worth of ALE coverage, but it can go as high as $25,000[10]
    • If you live on an elevation or at the bottom of a hill, make sure that landslides are covered in the policy.
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    Choose an affordable deductible. The chances of your home being destroyed in an earthquake are small. Still, the damage caused by earthquakes often severe. Because of the severity and expense of the damages, premiums for earthquake insurance are high—as high as the premium for homeowner’s insurance. In order to save money, a lot of homeowners keep the premiums low by agreeing to a high deductible.[11]
    • This can be risky. Instead of a number, the deductible for earthquake insurance is a percentage of the home’s value. So a 20% deductible for a $500,000 house would amount to $100,000. Most people won’t be able to produce $100,000 on demand. Can you?
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    Check into discounts for retro-fitting your home. Since the risk of an earthquake and the level of damage from a quake is mostly out of a homeowner’s hands, it’s not easy to get a discount on earthquake insurance. That’s because risk is calculated based on the location, size, and age of your home, as well as the type of soil it sits on and its proximity to fault lines. However, you can try to make your home more earthquake resistant, which can bring down premiums.[12]
    • Even though these bring down premiums, the discount might not pay for itself right away.
    • Earthquake proofing your home would include upgrades like bolting the framing to the foundation, bracing the walls with plywood, and attaching the hot water heater to the studs in the wall. [13]

Method 3
Comparing Insurers

  1. 1
    Check out their financial stability. Unlike deposits in a bank, the premiums you pay to an insurer aren’t guaranteed by any federal agency. If an insurer fails, you lose your money. While it isn’t likely a housefire would be the event causing an insurer to go bankrupt, a natural disaster can bankrupt an insurer on shaky financial footing. Therefore, it’s critically important that you investigate the financial stability of an insurer before you purchase a policy.[14]</ref>
    • You can find the financial strength on an insurer through one of the financial ratings firms. The strength of a firm is evaluated on a scale of AAA to D, with AAA being the best and D the worst. Some of the more well-known financial ratings services include Moody’s, Standard and Poor’s, and Fitch IBCA.
  2. 2
    Ask the state insurance commissioner about their history. State insurance commissioners will have records of complaints, licenses, and whether or not the insurer is covered by the state in case of default.[15]
    • Some state insurance commissions also keep records of the insurer’s loss ratio. The loss ratio describes the proportion of premiums spent in payouts. Anything less than 50% in payouts is suspicious—the insurer either overcharges or underpays.
  3. 3
    See if you can get any discounts. It never hurts to ask if you can get a discount on the premium price. While adjusting deductibles and making modifications to your house are likely to be the principle ways to receive a discount, there are a couple other ways to get your rates down.[16]

#* If you use the same insurer for multiple policies, like auto, homeowner’s and others, you’ll likely be eligible for a discounted rate. You can also ask the insurer if they issue discount to your employer. ==Sources and Citations==

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