No matter where you live in the U.S., it seems that your home will be threatened by a natural disaster at some point. Hurricanes in the east, tornadoes in the mid-west, earthquakes and fires along the Pacific, and flooding that can happen just about anywhere can all make for a bad day.
As I have always lived in the Los Angeles area, we get to deal with fires and earthquakes on a regular basis. In fact, the day Mrs. Frugal and I moved into our current home, a fire broke out in the hills above us. Thankfully, few homes were lost, and we knew the fire would need to go through several blocks in order to reach us.
Today, a fire burning in the hills above our valley has consumed over 105,000 acres (more than 164 square miles). I have family members that have evacuated and we’re praying they don’t lose their homes.
Now that I’ve thoroughly scared you, what can you, as a frugal couple, do to better your situation? Other than living somewhere you won’t be affected by natural disasters, insurance to replace your belongings is a good thing to think about.
I spoke with our family’s insurance agent, Tom Romano. (For those in California, I can’t recommend any insurance agent higher than Tom. You can find his State Farm insurance site through this link.)
Tom’s thoughts:
Know Your Insurance Policy’s Limits
“All insurance policies have limitations of coverage for certain types of personal property, like jewelry, money, firearms, and silverware. Customers should check with their agent to know the limits under their policy.”
Make Changes Periodically
“It is a good idea to meet at least every other year with your insurance agent to review your coverage and update any changes in your life.”
Thoroughly Document Your Belongings
“Good documentation is helpful in the event of a claim. The best way to document personal property is to take pictures of the items; perhaps on a separate chip [or hard drive]. The disk [storage device] should be dated and stored away from the premises. Receipts or warranty books are also good for documentation.”
Know Your Policy’s Exclusions
“Standard policy limits exclude damage caused by earthquake and flood. There are policies available to provide limited coverage for these types of losses.”
I would like to add a point that Tom didn’t bring up. Many families who don’t own their own homes do not carry renter’s insurance. This is a BIG MISTAKE! If your apartment or home were to burn, your landlord’s insurance would probably not cover your belongings.