Natural Disaster Policy

Quick Takeaways

  • Many insurers have responded to major natural catastrophes by raising insurance rates, reducing coverage and/or declining to write new or renewal policies;
  • NAR supports the development of federal disaster public policies that emphasize prevention, preparedness and the proactive reduction of risk and include emergency aid for disaster victims.
  • NAR's Disaster Preparation Resources page has many educational resources for real estate professionals, including how to plan for, protect against, respond to and recover from natural disasters.

There are different types of natural disaster coverage available, such as flood insurance, earthquake insurance, hurricane insurance, and wildfire insurance. Each type of coverage provides protection against specific types of natural disasters. It's crucial to understand the exclusions and limitations of natural disaster policies. Certain types of damage may not be covered, or coverage may be limited in certain circumstances. Agents should help clients review policy details carefully.

Agents should educate their clients about policy limits, which determine the maximum amount an insurance company will pay for a covered loss. They should also explain deductibles, which are the out-of-pocket expenses a policyholder must pay before insurance coverage kicks in.

Encourage clients to take proactive measures to mitigate natural disaster risks, such as strengthening structures, implementing evacuation plans, and securing valuable belongings. Insurance companies may offer discounts for certain risk reduction measures. If disaster strikes, damage should be documented, insurance companies should be contacted promptly, and homeowners should provide all necessary information to support the claim.

Natural disaster risks can change over time, so agents should advise their clients to review their insurance policies regularly and make necessary updates to ensure adequate coverage. By understanding these key aspects of natural disaster policies, real estate agents can better assist their clients in making informed decisions about protecting their properties and assets.

See References for more information