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Make Sure Your Policy Covers Freak Disasters

Crazy weather like a tornado in Brooklyn gets a native Kansan wondering about her insurance.

Floridians know how to prepare for hurricanes. San Franciscans are versed in how to act in an earthquake.

But New Yorkers have little experience with cyclones -- unless you're talking about the famed roller-coaster at Coney Island.

So when a twister touched down in Brooklyn, N.Y, earlier this month, many residents --including me -- were left wondering whether they are covered for disasters that rarely happen in their region.

The tornado was the borough's first in 118 years, and it came complete with 135 mph winds that uprooted trees and damaged homes in some areas. As a native Kansan, I know too well the destruction a twister can spawn -- my junior year of college, a funnel ripped through my apartment complex claiming random second floors, roofs and garage doors for souvenirs.

My fellow Kansans and other Midwesterners are experts at finding the best doorway or bathroom -- absent a basement -- to wait out a feisty funnel cloud. They can also tell you how important renters insurance is. Inevitably we all know someone (95% of the

city of Greensburg, Kan. on May 4, for instance) who lost it all in one of Mother Nature's temper tantrums, and we're marginally prepared as a region.

But what about weather that's unnatural for your region? The good news is that the risk of weather that graces a region less than once a century is as tiny as it sounds and doesn't merit added concern, according to insurance representatives and brokers.

"There are different classes of carriers: Some are like Hondas, some are like BMWs and some are like Ferraris, with regard to the level of coverage they'll provide," said Harry Rubenstein, an account executive at Harold L. Lee and Sons, an insurance broker based in New York.

The trick, as always, is to read the fine print. But when it comes to unlikely natural disasters, you may already be insured for more than you think.

A farmer's homeowners policy covers "most storm damage," according to the company's Web site. And "windstorm" damage, for instance, is usually covered in your typical renters insurance, according to a representative at State Farm Insurance. This usually covers damage caused by hail or tree branches in a windstorm and it may or may not include hurricanes and tornados.

Other potentially damaging events, like floods and earthquakes, require specialty policies.

Rubenstein notes that some insurance carriers may deem that "wind storms" and "high winds" are different things -- and hurricanes may be considered a step up from that. A separate deductible on your homeowners insurance for high wind or hurricane damage in certain areas can range anywhere from 1% to 10% of the value of your home.

For renters, things may be less complicated.

A few misperceptions about renters insurance: It doesn't increase substantially with cost of living, meaning it doesn't cost exponentially more in New York City or San Francisco, for instance, than it does in a smaller suburban area. Unlike housing prices or parking, there is no outlandish cost-of-living correlation -- just that the more you want to insure, the more it will cost, of course.

Even without a security alarm system, it is likely renters insurance won't cost you more than your monthly Netflix subscription. As it says on the Allstate Web site, "It only costs a little to insure a lot." Most insurers' Web sites have free quotes to help you shop, but you'll likely find minimum coverage starts in the range of $200 to $350 a year -- although some exists at $10 a month.

Whether you're coastal or landlocked can make a difference -- particularly for homeowners in a flood zone -- and your carrier may be a stickler about storm shutters or impact-resistant glass.

It's of utmost importance, as the hurricane season is arriving full force, for those in coastal areas to purchase flood insurance. You usually have to get it through the National Flood Insurance program in addition to a typical homeowner's insurance policy. Some insurers will supplement this coverage, and higher-end carriers such as AIG may write it for you, according to Rubenstein.

Also, earthquake insurance may have to be purchased through the appropriate earthquake authority in your area -- such as the California Earthquake Authority -- in addition to a property insurance policy.

But your region won't delegate all of the specifications of your policy. Almost everyone is covered for cross-region threats such as fire and theft, and the fine print of your policy probably also says it doesn't cover the following, regardless of whether they are common or uncommon to your turf:

  • Any ordinance of law, such as demolition.
  • Earth movements or rising or shifting of earth (i.e., an earthquake).
  • Water damage caused by a flood, tsunami, tidal wave, etc. (hurricanes, however, may be looked at as wind storms, so check with your carrier). Water damage that occurs from pipes freezing or bursting -- related to weather or not -- may or may not be covered, but can possibly be tacked on for as little as $6 a year, depending on the provider.

Some policies will have a list of what is covered, while others have lists of what's excluded. The most important question to always ask is "what's not covered?" Visit the Insurance Information Institute's

Web site for more on typical coverages.

One more tip: Consider supplementing renters insurance with liability insurance, which may already be included. "I always advise that renters in the city take the highest liability limit that they can afford. I often recommend they take a higher deductible and use that premium savings to buy more liability coverage," he says. That way, if your toilet or sink floods or drips down and you're sued by the apartment below you for damages they incur, you'll be covered. The good news is you'll likely find you can get up to $1 million in liability coverage for less than $100 a year. A lot for relatively little.

Needless to say, I will not be getting earthquake or flood insurance for the sixth-floor apartment I rent in New York, but it's good to know that should a freak storm break pipes or windows or start a fire, I'm covered.