Excluded Coverages should be Addressed before a Catastrophic Event Occurs We might think of Missouri before Kansas when considering the risk of an earthquake. However, Kansas has recorded 94 earthquakes to date in 2014 (Insurance Journal). This is significant to property owners because basic (ie. unendorsed) property policies exclude earthquake coverage. Because insurance policies often exclude catastrophic events such as earthquakes and floods, endorsements and stand-alone policies have been created to cover these perils. However, many consumers wait until after a disaster to buy insurance, as it is not unusual for insurance companies to see a spike in applications after such events.
There are problems with waiting until a disaster strikes. First, if your property is affected, you won’t be covered. Second, companies often impose moratoriums in affected areas, due to the possibility of an aftershock or continued risk. Third, even if the coverage is available, the probability of having two or more consecutive catastrophic disasters in close proximity is small. The key is to get the coverage before a disaster strikes. Can the government help in getting coverage? The government is not an insurance company but can provide assistance, if financially able, in the form of loans that must be repaid. The bottom line is, property owners will probably fall short if they count on the government for catastrophic event insurance. We recommend that you prepare against potential disasters.
Please contact our office if you would like to learn more about earthquake, flood, or other excluded coverages on your policy.