Hurricane Katrina, the Southeast Asian Tsunami and the recent Japanese earthquake have been major natural disasters around the globe over the last several years. When looking to purchase auto insurance, make sure to include the possibility of a natural disaster. Also, keep in mind that most reputable insurers provide collision coverage, but not all of them cover damages incurred from natural disasters.
The following are FAQs to help you acquire the best auto insurance coverage for natural disasters.
1. Is liability insurance enough?
Typically, liability insurance does not cover for damages sustained by a natural disaster. If your car is damaged or totaled from earthquake, avalanche, lightning, flood, blizzard, hurricane, thunderstorm, tornado, tsunami, drought, hailstorm or a fire as a result of a natural disaster, and you have liability insurance, your insurer will not cover you for any damages incurred. Liability insurance covers for bodily injuries or death of third parties for which you are responsible and it also provides coverage for a legal defense if a third party files a lawsuit against you for bodily injuries, medical bills and loss of income as a result of the accident for which you are responsible.
2. How does comprehensive insurance cover me?
Comprehensive insurance may provide coverage for damages sustained from most natural disasters, including hurricanes, flood, fire and so on. In addition, it can provide coverage for damages sustained by animals or vandalism. Although you could buy coverage for individual disaster, it is significantly cheaper to purchase comprehensive insurance coverage and have protection against all or most types of natural disasters at a lower premium. Of course, your premium will also be subject to the area you’re living. For instance, if you reside in Florida that is a high risk area for hurricanes, you will be required to pay a higher premium for a comprehensive coverage plan because your insurer undertakes a higher risk to provide you with coverage.
3. What if I need a rental car?
If your car is totaled by a natural disaster and you need a rental car, you will have to purchase rental insurance. If you already have a comprehensive insurance policy, you are most likely covered for the rental car within the limits of your current insurance policy. In addition, if you charge the rental car costs on a credit card, a rental car loss damage waiver will be included in your credit as a benefit.
4. What should I do after the damage occurs?
If your car sustains damages from a natural disaster you may contact your insurer immediately and inform them about the event in order to file an auto insurance claim as soon as possible. If you have comprehensive insurance coverage, the maximum amount you will be covered can equal your car’s actual value minus the deductible you have selected. It makes sense to choose a high deductible because it lowers your insurance premium. For instance, if you set a deductible at $1,200 and your car damages are $2,600, you will pay $1,200 and your insurer will pay $1,400. The best thing to do is to contact your insurer to check what types of natural disasters are covered under comprehensive insurance.
5. Do I have to file a claim?
If you can pay for the sustained damages out of your pocket, your may not file a claim to your insurance company. Keep in mind that every claim you file is reflected in your insurance record and it can increase your premium.
Overall, sustaining damages from a natural disaster can be really frustrating. However, if you have the right auto insurance coverage you can be sure to get the best coverage at the lowest premium.
Sources
http://www.buzzle.com/articles/list-of-natural-disasters.html
http://www.4autoinsurancequote.org/uncategorized/does-auto-
insurance-cover-damages-from-natural-disasters/
http://www.emergencypreparednesstips.org/natural_disasters_and_auto_i
nsurance.html
http://moneywatch.bnet.com/retirement-planning/blog/what-works/why
-you-should-buy-rental-car-insurance/435/
http://www.esurance.com/faq/weather-damage-claim