A Beginner’s Guide to Insurance for Fire and Other Natural Disasters

Net premiums in the US insurance industry exceeded $1.2 trillion in 2018.

Within this massive industry, there are many smaller sectors and subsectors. Insurance for fire and other natural disasters forms one important part of this framework.

If you’ve recently moved into a new home, and you’re wondering whether this type of insurance would represent a good investment for you, there are several things you need to consider. 

Let’s take a closer look at insurance for fires and other natural disasters.

Do I Need Insurance for Fire and Other Natural Disasters?

Many houses must, under federal legislation, legally have flood insurance. However, these rules don’t apply to other types of homeowners’ insurance.

You might be required to take out this type of insurance by your mortgage provider.

Even if the choice about whether to take out this type of cover is entirely yours, it’s usually a good idea. Homes can suffer extreme damage in fires or other disasters, and the cost of this will fall entirely to you if you don’t have a homeowners’ insurance policy that covers these risks.

What Does Disaster Insurance Cover?

The specific coverage that disaster insurance offers varies from one policy to the next. However, there are some basic risks that will usually fall under its remit.

Structural Damage

Most of these insurance policies will cover the cost of rebuilding your home if it suffers structural damage. This can range from collapsed walls and broken windows to complete destruction of your home.

Contents Damage

Most disaster insurance will cover damage to the contents of your home. The main considerations here would be furniture, white goods, electronics, and valuables such as jewelry.

You should note that only contents that you mention in your insurance application will be eligible for coverage.

How Much Does Insurance Cost?

Like every other type of insurance, coverage against fire and other natural disasters will have a premium that is based on the risk of damage. The more likely you are to experience a fire or other natural disaster, the higher your premium will be.

There are a few factors that are relevant here.

One is the material from which your house is built. Wooden homes will suffer far more structural damage in a fire than concrete-built ones.

Another consideration is the climate in your area. If it’s dry and hot for long stretches of the year, your fire insurance premium will be higher.

Certain areas are also more likely to suffer natural disasters (such as tornados) than others, therefore, they will have higher disaster insurance premiums.

Get the Protection You Need for Your Home

Moving to a new house can be a costly business, and you might be unwilling to consider taking on more expenditure unless you absolutely have to. However, insurance for fire and other natural disasters is not something you should neglect.

While it might seem like nothing but an expense in the short term, it has the potential to save you from financial ruin if disaster should strike.

To learn more about how we can help to keep your home safe, contact us today.