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Ensuring that your home is protected against all types of hazards is important. Small print in many different insurance policies may not see you covered against everything that you think – this can include “Acts of God”. The definition of an act of God can also have a level of ambiguity, therefore, you could find yourself in a battle with the insurers. As such, if you do not have the correct mortgage insurance cover and something like a wildfire or earthquake damages your home (or worse – wipes it out!), you could find yourself in a bit of a pickle.
Everything can be insured to some extent whether it is a building, person, motor vehicle and how they are insured can be negotiated with an insurance company. If you do not choose to have the correct level of insurance cover for anything of these then you must realise the risks and have then financial means to ensure you can still operate effectively (for example by not taking it home insurance and your home is destroyed – have you another home you can live in or enough funds put aside to purchase another home?). Here are some of the things you will need to know about this type of policy in terms of what is covered and how it is incorporated into most standard home insurance agreements.
Mortgage hazard insurance usually covers things such as:
Depending on where about you are located in the US, you are more likely to be exposed to things such as Earthquakes, however, it is important to note that even people not directly located on or near the fault lines will experience earthquakes from time to time. The earth is changing at a significant pace and as such, these types of activities are far more frequent and likely. When looking into this type of insurance policy, be sure to read all the small print so you can see exactly what is included. If unsure, ask and do so in writing (maybe email) to ensure your query is covered (or not) on the insurance policy. The biggest hazard to people at the stage of agreeing what needs to be covered is that they do not believe that they live in an area which will expose them to be the next victim (of an event such as an earthquake). These are then sometimes the very people who need this cover.
The main way to get hazard insurance is to have this included in your home insurance policy. Not all insurance companies will offer this so be sure to shop around and do your research. The policy is almost a bolt on to the policy and you can change the level of cover you are looking for quite easily. The more cover you are looking for (and lower excess) will mean that the monthly (or annual) payment is higher. People sometimes confuse this sort of cover and look to get a specific policy covering hazards – this can be done; however, it will be far more expensive than just looking at your current home insurance policy and adding this to it.
If you take this additional element of the policy out, then the payment of money to you in the time of need is usually pretty simple. When a specific “hazard” happens then this can usually be drastic and if you need to get alternative accommodation then this element of the policy will assist. This will include putting you up in accommodation for a period (for example if your house is not able to be lived in due to flooding / earthquake etc).
In addition to this, when you do then receive a full overall settlement amount from the policy, this is done the same as every other standard home insurance agreement. You will need to justify the money lost and the insurance company then may, in fact, send out an agent to your home to see the damage. Alternatively, they may decide to use technology so you can show the damage (or send pictures) and they give you a settlement quote based on this. Insurance companies will normally also look to settle as low as they can, therefore, it is important for you to consider the damage value and ensure you put every element necessary into the claim.