Hazard Insurance Protects Property from Mother Nature

As many already shall know, hazard insurance covers property damage caused by fire, wind, storms, and other similar events. But coverage for earthquakes and floods, especially, might not be included with your hazard insurance, and you should read your policy carefully and consult your agent. If you have a home, business offices, or property that resides within an area that is particularly susceptible to extreme weather or disasters, then you might need to have a special rider on your insurance policy. Additional riders for tornado damage or hurricane damage are sometimes needed, as well.

An important thing for you to know is that when you look into additional hazard insurance coverage, you may get pitched on mortgage life insurance, which just pays off the lender in the event of your death. While commissioned salesmen try to make this sound like an ingenious piece of protection strategy, it is not specially if the interest rate on the loan is low and you have survivors who may need the mortgage for tax reasons. Instead, increase your regular life insurance coverage so your survivors can invest any proceeds after your death to provide enough money to continue paying the loan.

California is targeted for earthquake coverage, but at least 16 other states are additionally considered at higher than average risk for quakes: Arkansas, Colorado, Idaho, Illinois, Indiana, Kentucky, Massachusetts, Mississippi, Missouri, Nevada, New York, South Carolina, Tennessee, Utah, Washington and Wyoming. Earthquake coverage can be quite expensive, but you need to consider it if: you live near a fault line; your home is more than 50 years old; your home is built on a slope, landfill, or flood plain. In fact, earthquakes can happen almost anywhere in the United States. The U.S. Geological Survey has found that quakes do occur most frequently west of the Rocky Mountains, but at the same time there are 39 states where an earthquake could happen suddenly at any time.�¯�¿�½

Flash floods are the most deadly weather-related killer in the United States, killing nearly 130 people every year according to the National Weather Service. There are numerous kinds of floods that can potentially cause very significant damage, including: river floods, caused by excessive rain or blockage; coastal floods, caused by winds and rains from tropical storms and hurricanes; and urban floods, which occur when storm sewers are unable to handle a torrential downpour and city streets become swiftly moving rivers. The flash floods usually occurs within minutes or hours of exceedingly large volumes of rainfall, a dam or dike collapsing, or a large break in an ice jam. The deadly waves consume or subsume all things in their paths.�¯�¿�½

Hurricanes are immensely powerful storms with winds blowing anywhere from 126 to 340 kilometers per hour. Formulating out of tropical storms that refuse to die, they bring with them enormous waves and torrential downpours of rain. While hurricanes do make landfall on coastal areas (making those areas particularly vulnerable to the storms’ rage), they are capable of causing severe destruction many hundreds of kilometers inland before they fade.

Within severe thunderstorms, tornados can formulate. When a front of hot, dry air collides with one of somewhat cooler, more humid air, generated winds create a horizontal spinning effect. Strong updrafts then pull the warm, moist air upward and create a gargantuan vortex of viciously rotating winds.

The peak season for tornadoes in southern states is March through May; in northern states it’s the summer months. Tornadoes are most likely to occur between 3 p.m. and 9 p.m local time, but there are records of their taking place at all times of the day. Some tornadoes stay very local to their touchdown, moving only a few kilometers before dissipating, but others travel more than 170 kilometers. Some tornadoes are almost stationary, but most move at an average speed of 50 kilometers per hour while others hit 120 kilometers per hour. Tornadoes can come in groups. In one amazing 24-hour span in 1974, 148 tornadoes struck in 13 states and at the same time in Canada. Most insurance policies cover tornado damage under “windstorm or hail,” so it is vital that you check with your insurance agent if you have adequate protection.

Hazard insurance is taken so seriously by financial professionals that one company, Loan Protector, has devised a unique product for the benefit of professional mortgage lenders.

The company says, “A true blanket hazard insurance policy that covers an entire mortgage portfolio has not generally been available to mortgage lenders.” The company further explains that “there are two kinds of collateral protection insurance for mortgage loans:

a) Force placed hazard insurance coverage where the lender identifies mortgage loans with cancelled or missing hazard insurance and orders coverage on the property from a lender-placed insurer, and

b) Blanket mortgage hazard insurance coverage which covers the lender’s entire portfolio in case of any hazard loss to property where the borrower has failed to keep insurance in force.”Ã?¯Ã?¿Ã?½