If this past week was not a wake-up call to make sure you are financially prepared to survive a natural disaster, what is?
Marylanders barely had time to get over the earthquake last Tuesday before they had to brace for Hurricane Irene over the weekend.
While we survived these disasters relatively unscathed, that might not be the case next time. So before nature strikes again, make sure you have the necessary insurance coverage and your papers in order. After all, hurricane season lasts through the end of November, and nature could throw us another curveball.
Here are steps to consider:
Review homeowner's policy "We recommend an annual insurance checkup to determine that you have enough coverage," says Robert Hartwig, president of the Insurance Information Institute. "Does it cover the value of everything you own, and does it cover the value of rebuilding your house?"
Insurance specialists recommend adding some extra coverage if you don't already have it.
Hartwig advises adding an inflation endorsement to your policy so that your coverage limit automatically goes up when the local construction costs rise. He also suggests "law or ordinance" coverage that will pay for any additional costs to rebuild your house up to code.
Don Grauel, president of L.E. Goldsborough & Son in Towson, says water damage often is the result of a sump pump failing to work. You can protect against losses from this, he says, by adding coverage for drain and sewer backups.
Be aware that your policy, particularly if you live in coastal areas, might carry a hurricane deductible that's higher than your regular one, says Therese Goldsmith, Maryland's insurance commissioner. It can be a flat sum or a percentage, such as 2 percent or 5 percent, of the total amount of coverage.
Flood insurance "If you look at the aftermath of Irene, most of the damage was from flooding," Hartwig says. But hurricanes aren't the only source of flooding, he says. A nor'easter or fast-melting snow can leave you ankle-deep in water other times of the year.
Floods aren't covered under homeowner policies. Protection is available under the federal National Flood Insurance Program; you can buy a policy through your regular agent. The coverage kicks in after 30 days.
The maximum coverage is $250,000 for structural damage to a house and $100,000 for contents. Premiums, tied to how prone your neighborhood is to flooding, can range from $365 a year for maximum coverage in low- to moderate-risk areas to as much as $2,734 in high-risk locales.
(It's possible to buy more coverage from a few private insurers. Chubb Group of Insurance Cos., for example, sells flood insurance worth up to $15 million for a house and contents to Marylanders, says spokesman Mark Schussell. You can also purchase coverage on top of the federal policy from Chubb.)
If you want a federal flood policy, buy it before Sept. 30 to play it safe. The federal flood program expires on that date, unless Congress extends it. And if Congress doesn't act — and it has let the program lapse before because of legislative squabbles — you won't be able to buy or renew a policy. Existing policies will remain in effect, though.
Earthquake insurance Protection from quakes also isn't standard in homeowner policies, although some insurers allow you to add it. After a quake the size of last week's, insurers can elect to wait up to 72 hours before issuing new coverage within 50 miles of the epicenter, Goldsmith says.
That deadline has now passed. But you might not want to buy coverage, given how rarely earthquakes hit here. You could put the money toward flood insurance or other beefed-up coverage instead.
Take an inventory If you have to make a claim, the process will go faster if you have documented the contents of your home. You can go room to room with a video camera, describing the items and value, or take still photos of your belongings while writing down the price and serial numbers.
The Insurance Information Institute also offers a free home inventory software program called Know Your Stuff at http://www.iii.org/software. And the National Association of Insurance Commissioners offers free inventory apps for iPhones and Androids at http://www.naic.org.
Some insurance specialists advise keeping the inventory, your policy and other key documents in a fireproof box that you can grab in an emergency. They also recommend keeping copies with a trusted friend or relative living in a different city or state who won't be affected by the same disaster.