Natural disasters are top of mind lately. Wildfires have been raging across the West Coast for weeks now, and hurricanes Sally and Laura just ravaged countless cities across the South. According to the Insurance Information Institute, natural disasters caused more than $150 billion in damages in 2019 alone. In 2018, it was $186 billion. For Americans considering homeownership, these trends can be particularly worrisome—especially for those buying a house in a flood, hurricane, or wildfire zone.
If you fall into this category, there are fortunately ways to protect yourself—and your investment—in the event of a natural disaster. Here are the top three:
1. Always know your risk
Before buying a house in a flood zone, make sure you understand your risk. In areas that have a lot of flooding, FEMA’s flood maps can help you gauge the hazards your property comes with. If you’re in a wildfire-prone area, the U.S. Department of Agriculture and U.S. Forest Service’s Wildfire Risk to Communities tool can be helpful.
To see if your home might be at risk for earthquake damage, use the U.S. Geological Survey’s tool to locate any faults or folds in the area.
2. Look for properties that mitigate that risk
When searching for a home, look for properties that have built-in mechanisms to reduce disaster-related damage. This might include a sill-plated foundation in earthquake-prone areas, fireproof materials in a region with wildfires, and proper lot grading in areas with a risk of flooding.
When buying a house in a high-risk flood zone, an elevated home or home on stilts might be your best bet.
3. The right insurance coverage matters
Comprehensive home insurance is critical when you live in a disaster-prone place. Though most homeowners’ policies cover damage caused by fire—including wildfires—you’ll want to be sure there’s enough coverage for your entire structure, belongings and temporary living costs should a total loss occur.
If you’re buying a house in a flood zone, you’ll need to get flood insurance, as flooding is not covered under your average homeowners’ policy. You can get a policy through the National Flood Insurance Program by contacting any insurance agent in your area. There are also private flood insurance policies if you want to ensure you’re extra covered.
The bottom line
Natural disasters don’t have to preclude you from buying a home. Just make sure you take extra precautions both in choosing your property and insuring it, and you can protect your investment from whatever unexpected events may come.
