Why Insurance May Not Fully Cover Natural Disaster Damages

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The U.S. is one of the countries that are susceptible to natural disasters. These natural disasters can strike at any time of the year, without prior warning, and are capable of wreaking havoc on communities and the economy. These natural disasters — earthquakes, droughts, floods, hurricanes, landslides, tornadoes, and wildfires — threaten the community.  

The natural catastrophes in the United States represented an exceedingly high share of the global financial losses in 2021, totaling approximately $145 billion and costing insurers nearly $85 billion. However, losses resulting from natural catastrophes can be minimized by taking proactive steps to avoid them. In the event of a natural disaster, it is possible to protect people, structures, and property.

A Storm on the Horizon 

Certain natural disasters, like lightning strikes, house fires, and windstorms, can happen anywhere in the country. It is predicted that by 2036, the average temperature in Texas will be 3 degrees warmer than it has been during the last half-century. 

Extreme monthly summer temperature trends are expected to be on the rise in the state overall. In addition, in some areas of the Texas Gulf Coast, the risk of hurricane storm surge may double by 2050 as a result of rising sea levels. With these trends in mind, it’s crucial for homeowners to be prepared for natural disasters relevant to their area and how to deal with the aftermath. 

Natural Disaster Exclusions

SoManyme might think that insurance covers all forms of natural disasters, but the truth is that some policies do not. Whether or not the insurance covers certain risks depends on your signed policy. Therefore, it is strongly advised that you look into the various options for additional coverage that includes protection from natural disasters that can happen in your area.

Your insurance coverage will depend on your location, property type, and how much protection you want. For example, when you buy insurance for your home or vehicle, you should ensure that the policy sufficiently covers damages caused by natural disasters. This is especially important if you live in an area prone to these types of disasters.

A standard homeowners insurance coverage will protect your home from some of the damages caused by natural calamities, but not for all of them. For example, a standard homeowner’s policy does not usually cover earthquakes and flooding in Texas. So if you want to minimize the financial impact of repairs and reconstruction, you’ll need to get extra coverage for both disasters.

A Supplemental Solution

Supplemental plans offer additional coverage in addition to the basic car or homeowners policy. In most cases, the cost of coverage will vary significantly between states due to different factors such as locations and the type of risks involved. Texas is one of the states that has experienced a change in rates and an increased need for extra coverage due to extreme and unusual weather events.

The average annual cost of homeowner’s insurance for a $250,000 house in Texas is $1,860. This amount is significantly higher than the $1,383 national average. In addition, Texas is one of the most expensive states to get auto insurance, with annual premiums averaging $1,926. 

Seperate Policy Protection

Car insurance coverage requirements in Texas require all drivers to have minimum insurance coverages of $30,000 per injured person, up to at least $60,000 per accident. In addition, motorists in Texas are required to carry insurance with a minimum policy limit of $25,000 for property damage.

It is wiser to add supplementary insurance to your existing insurance policy if you want more protection rather than purchasing two separate policies. So if you already have a policy in place, you can get additional coverage by purchasing supplemental insurance for your properties against natural disasters. 

Make Sure You Are Fully Covered

The Earth’s average temperature is expected to rise over the following decades. Consequently, experts estimate that the severity and number of natural disasters will significantly increase in the next few years. If you live in Texas, you will most like experience some of these natural events.

Fortunately, you can take action to ensure that your home, car, and other properties are adequately insured to prevent unnecessary losses caused by natural disasters. However, many types of insurance coverage are available, so it’s essential to do your homework and understand all alternatives before purchasing them. 

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