How is Disaster Insurance Different from Property Insurance?

by Ted Ricasa on Jan 17, 2014

Disaster Vs Property InsuranceAs a homeowner, you carry property insurance to protect your assets and your most valuable investment: your home. Most homeowners assume they don’t need to also carry disaster insurance. After all, any damage to your home is covered by your property insurance, right? There are major differences between property and disaster insurance, and knowing the difference is vital for safeguarding your home.

Disaster vs. Property Insurance

Property insurance protects your assets from common risks, such as theft or accidents. Disaster insurance covers your home in the event of a major occurrence, including floods, fires, or other issues. In addition, disaster insurance is specialized, you need to make sure you know which types of disaster are covered, otherwise you could find yourself in a situation where neither your property insurance or disaster insurance can cover damages or loss. 

Do I Need Both?

Do you need both? Most people assume they won’t need disaster insurance. True, the odds of being on the receiving end of a major disaster are slim, but when it happens, you could find yourself unable to cover the costs or damages to your home. Every year, Americans sustain billions of dollars in damages due to storms, floods, or fires. Talk to your insurance agent and find out what coverage you will need in a disaster policy.


When selecting either a property or disaster policy, you need to understand the difference between replacement cost coverage and actual cost coverage. Replacement cost policies can cover the entire cost of restoring your home, minus your deductible. An actual cost policy will only cover the current value of your home or property, minus the deductible. If your home or the contents within have depreciated, an actual cost policy could leave covering a greater cost by yourself.

About Fast Home Help: Our real estate professionals at Fast Home Help will provide you with the information you need, when you need it the most. To learn more about the value of your property, request a free, no-obligation Property Privacy Audit™ today.

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