Quake and hurricane insurance: a primer

Many homeowners are checking their disaster insurance, after a big swath of the nation was hit by a 5.8 magnitude earthquake Tuesday and with Hurricane Irene taking aim at the U.S. mainland, as well.

On "The Early Show" Wednesday, personal finance expert Carmen Wong Ulrich, author of "The Real Cost of Living," shared tips on buying quake and hurricane insurance: who should have it, what it should cover, and how much to buy.

Photos: East Coast quake

Earthquake insurance

A case can be made that nearly everyone should have it. There have been earthquakes in 39 states in our country, and though the majority of major and expensive quakes have happened on the West Coast, especially California, they can happen almost anywhere, as we saw Tuesday.

The Insurance Information Institute says one reason more Americans are vulnerable to earthquake damage than ever before is that 90 percent of our population lives in seismically active areas, many of them cities and city suburbs.

Your regular homeowners policy, or renters or business owners policy, does not cover structural damage from an earthquake or damage to personal items from a quake and/or relocation costs -- you need what's called an earthquake endorsement, or separate policy. But your homeowners/renters policy may cover fire and flooding due to cracked/leaking pipes. Scour your policy to see what's covered and what's not.

Cars with comprehensive insurance coverage are covered for damage from an earthquake.

The cost depends on the age and makeup of a home (wood frame, stone, etc.), as well as its location (for instance, coverage in Maryland would run you less than in California), the carrier, and your deductible.

Deductibles can range anywhere from 2 percent to 20 percent of the replacement value of the structure. So if you're looking at a $200,000 replacement value for your home, your deductible could run from $4,000 to $40,000. For example: The average cost of one year of coverage in California was $707 in 2009, according to the California Earthquake Authority.

Hurricane insurance

Flood damage is not covered under standard home insurance policies, but insurance is available from the National Flood Insurance Program (NFIP) and can be purchased from the same agent or broker who provided your home or renters insurance. Additional information on flood insurance can be found at FloodSmart.gov.

According to the Insurance Information Institute, the annual average insurance premium paid for flood insurance in 2010 was $594. Again, it depends on your home's location (whether it's in a flood zone and how bad a zone it is), as well as how much coverage you take out and your deductibles.

Earthquake and hurricane insurance

Both types coverage are attainable, but it can be more expensive if you find that you've been re-zoned into a higher level flood zone. A lot of rezoning happened after the tsunami and Hurricane Katrina.

You are eligible to purchase flood insurance as long as your community participates in the National Flood Insurance Program. Check the Community Status Book to see if your community is already an NFIP partner.

If you can afford disaster insurance, you probably should have it. Floods can happen anytime, and not only from hurricanes or near large bodies of water - they can stem from streams, lakes, underground water or other situations. If you're in a high-risk area for hurricanes, floods and earthquakes, you absolutely should consider purchasing it.

Don't use the price of your house as the basis for the amount of insurance you purchase. The market price of your house includes the value of the land on which the house is situated. In almost all cases, the land will still be there after a disaster, so you do not need to insure it. You only need to insure the structure, for rebuilding it and/or replacing it.

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