Do I need a separate “Disaster Recovery” insurance policy?
$30 per month is $360 per year. Your homeowners insurance would pay for most disasters (NOT flood) less your deductible, there is also loss of use on the policy that would pay for the difference in your costs if you have to live elsewhere when your home is being repaired & you can’t live there. Homeowners insurance covers tornadoes. If you buy this insurance, there is a clause in your homeowners policy about other collectible insurance & if there are 2 policies covering the same thing, they will only pay a portion of the loss compared to the coverage of each policy. Say this disaster policy covers $100,000 – your mortgage amount – your homeowners policy covers $200,000 – cost to rebuild (for sake of easy numbers), your homeowners policy will only pay up to 2/3 of the loss & your disaster policy may only pay 1/3. If your disaster policy pays first, your homeowners policy will probably only pick up the rest – say there is a $150,000 loss & your disaster policy pays $100,000, your homeown
