If you think you are completely covered by your insurance company, think again. There are five areas you might not have any coverage for, and you may be unaware of them. Here are the top five "blind spots" insurance companies have, according to USAToday. These "blind spots" may cost you from being covered when disaster strikes.
1. Flood Insurance
The Federal Emergency Management Agency has reported that every state has received flooding in the past five years. A poll taken by the Insurance Information Institute found that only 12% of homeowners nationwide have flood coverage.
In order to obtain coverage for flooding, you must purchase a separate policy because homeowners insurance does not cover for flooding. The National Flood Insurance Program offers flood coverage. Your state may also flood coverage. It takes 30 days for flood coverage to start, so make sure to get it before hurricane season!
2. Insurance will Not Pay for Your Totaled Car
If you total your car, you will only receive the amount the car was worth at the time of the collision. So, if you bought the car for $20,000 and at the time of the crash, it is only worth $15,000, you will only receive $15,000 for your car, minus your deductible. Depending on your monthly payment, the amount you owe on your car will vary, but whatever you owe will have to come from your pocket.
However, if you have gap insurance, you will not have to pay anything out of pocket. Gap insurance will pay the difference of your losses. You can obtain gap coverage from your car dealer or insurance provider.
3. No Sewage Plan
Your regular home insurance plan will not cover back-ups in sewage lines. Sewer back-up coverage will clean up and repair any sewage from your house.
This type of insurance usually ranges in about $40-$50 a year.
4. No Disability Plan
A short-term disability plan will cover your bills while you are unable to work. Long-term disability will do the same, but you can only obtain this coverage once you have been out of work for a year. If you experience a disability, but you are only out of work for three months, you will need to utilize compensation from a short-term disability plan. Most disability plans are offered through people's employers. However, independent coverage is optional and a wise investment.
According to the Social Security Administration, one in four people will obtain a disability before retirement age. If your employer does not offer short-term disability insurance or you want to receive more coverage you can look into short-term insurance offered from several companies such as State Farm, Metlife, and Mutual of Omaha.
5. No Earthquake Coverage
Your home insurance will not cover any damage obtained from an earthquake. In order to be protected from an earthquake, you must take out a separate policy.
In California, you can purchase this coverage as an add-on or through California Earthquake Authority. If you live in another state, you can ask your insurer where to purchase earthquake insurance.