5 free ways you can protect your home from natural disasters

By Nick Rivers on February 24th, 2012

With wildfire, hurricane and tornado seasons approaching in many parts of the country, the Insurance Information Network of California (IINC) is offering five ways for homeowners to prepare in the event of a disaster.

The advice is especially relevant to California, which could face more wildfires than usual because of a dry winter. But homeowners in other parts of the country also need to be on guard. Hurricane season starts in June for Eastern Seaboard states and those along the Gulf of Mexico. Tornadoes are also an ongoing danger in much of America's heartland.

Take these precautions, says the IINC:

  1. Begin by doing an inventory of your home. This will let you identify and account for items in your insurance policy. The IINC's free home inventory software can help.
  2. Make sure all financial documents are in order. Put important papers in a "grab-n-go" box in case of evacuation, or keep them in a bank safety-deposit box.
  3. Prepare an insurer emergency contact list. Put insurance contacts and policy information in your smartphone or create a wallet-size hard copy using IINC's Insurance 411.
  4. Prepare for evacuation. Choose a family member to gather financial documents, clothes, prescription drugs and irreplaceable valuables.
  5. Re-evaluate your homeowner insurance policy. It's always a good idea to consider updating coverage.

Be sure to take another look at your home replacement coverage if the worst happens. Insurance industry experts say there are three types of protection:

  • Basic replacement cost coverage. Covers the appraised value of the home. But keep in mind that there can be a large gap between that value and what it may cost to rebuild. For example, your home may have been valued at $100,000, but the construction and other costs could come with a $150,000 reconstruction price tag. It might be wise to consider more complete coverage.
  • Extended replacement cost coverage. Protects against inflation, higher construction costs and other unexpected charges. This coverage is usually the one of choice for most homeowners. Extended replacement usually pays 25 percent above the original policy amount when the home was valued. A homeowner can opt to pay more and raise coverage by 50 percent or 75 percent above the original appraisal.
  • Guaranteed replacement cost coverage. Pays to rebuild your home regardless of cost, without any percentage ceiling. But insurers don't include this option with every policy, instead offering extended replacement cost coverage for added protection. If you are offered guaranteed replacement, is will probably raise your yearly premium anywhere from 2 percent to 5 percent.

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