You can generally expect your homeowners insurance
to help pay for additional living expenses for up to 12-24 months while
your home is being repaired. But, homeowners insurance usually pays
only after they verify you have a legitimate claim. After Katrina, many
insurers made an exception, automatically distributing enough to cover
two weeks’ worth of additional living expense to anyone in an area
subject to mandatory evacuation. Some companies even gave small advances
on contents under the personal property part of their homeowners
insurance policies.
If you have to wait to get your check, it
helps to have cash that is easily accessible in a bank account or money
market fund. Stashing cash at home isn’t a great idea because if your
home burns down and you weren’t able to get to your cash, most
homeowners insurance policies only cover $100-$200 in cash whether it is
stolen or burned up in a fire. Your goal should be to have an emergency
fund available to take care of your family for 2-4 weeks (minimum)if
possible. In a disaster it might be hard to even find a local bank to
get cash. Debit/credit cards with a statewide or national bank would
perhaps be better.
Your biggest problem in getting your claim handled may be in either not having the proper homeowners insurance coverage
or not having enough coverage. Most good homeowners insurance policies
today cover up to 120% of your dwelling coverage limit. It is important
that you review the dwelling limit with your agent every couple of
year’s at a minimum. Homeowners insurance policies do not cover
Flooding, but you should again see your agent for this coverage.
