Our most recent earthquake here in California should serve as a reminder that Mother Nature can have a temper. Tornados, hurricanes, floods, mud slides and other natural disasters take a tremendous toll on everyone in their path whenever they hit. Where do these disasters hit the most, though?
Per the International Disaster Database, every country faces different natural disasters and the challenges they present. The database is compiled with 114 years’ worth of statistics and analysis to help better prepare those who could be affected and to establish what insurance risks affect property owners.
The United States have the highest occurrence of disasters with an average of 735 instances per year. These events include storms, floods, earthquakes, and hurricanes to name a few; though, severe storms were the most prevalent. In 2013, 54% of natural disasters in the U.S. were classified as storms. These storms created a total of $12.46 billion in losses, according to Aon Benfield.
While storms rank at the top, the second most common disaster presents more of a challenge – floods. This challenge comes because many people who should have flood insurance do not. Most assume that since they haven’t experienced a flood before, they shouldn’t worry about it now. That’s just simply not the case. A flood can hit at any time, and your homeowners insurance policy will not cover damage from a flood.
So far in 2014, Aon Benfield has reported that floods have created losses totaling $10 million. Unfortunately, too many times people think they are prepared for a disaster only to find out later that nothing could be further from the truth.
There are some common misconceptions that most Americans hold that create these gaps in coverage:
The government will come in to help after a disaster and it’s not as important to worry about insurance - If the disaster is big enough, many feel that the government will just take care of them. While there is disaster relief that comes with a large natural disaster, it’s not coverage you can count on, manage, or even rely on to make you whole again. It is limited and the more folks that rely on government aid from a disaster, the less support there is to go around to rebuild cities, government buildings including schools and emergency services, and to repair roads that make it possible for rescue workers to get in and out of affected areas to bring help.
I have homeowners insurance, so that means I’m covered. – This is not true in the case of floods as we’ve talked about, and if you’ve not reviewed your policies recently with an insurance professional, you may not have enough coverage to protect you from a disaster.
If there’s never been an earthquake, flood, tornado, or hurricane in my area before so I don’t need to worry about it now – With most disasters, there isn’t time to see it coming, let alone scramble to ensure coverage is in place before it gets here. Once a disaster hits, there isn’t a retroactive policy you can purchase to help. You will be left to pay for damages out of your own pocket, which could bankrupt you and your family – turning a bad situation into a devastating one. As opposed to crossing your fingers and hoping the pattern of clear skies sticks around, wouldn’t you rather be prepared should a disaster strike? Some flood policies start as low at $10 a month – well worth the peace of mind you’ll have once you have a policy like this in place.
The take away here is that the U.S. leads the world in natural disasters, and no area is safe from a disaster of some kind. Having the peace of mind a disaster policy brings, and the protection it offers your family, are well worth the small additional cost it may add to your insurance bill. If you’d like to talk about the disaster risk in your area and how we can help you protect the things that matter most to you, please give us a call at 888-512-8878 or visit us online at www.mitchellandmitchell.com and we’ll be happy to review your coverage with you and come up with a plan to ensure you’re properly covered.