Home selection can help homeowners lower insurance rates significantly, but so can the location of your new home. Since the United States is such an expansive country, it has a large array of climates and environments. When purchasing homeowner’s insurance, it’s important to consider the risks associated with your area. The majority of standard insurance policies should cover most natural disasters including storms, high-winds, fires and tornadoes. However, depending on your location, you may be at risk for earthquakes or floods. Unfortunately, standard homeowner’s insurance does not cover either of these situations.

If you are thinking about purchasing a home in or near a coastal region, river valley or flood-zone area, you should investigate flood insurance. The U.S. Federal Emergency Management Administration (FEMA) created a division called the National Flood Insurance Program (NFIP) in 1968. Since the formation of this program, over 20,000 communities have joined by establishing and maintaining flood plans approved by the NFIP. In exchange for their participation, NFIP offers flood insurance to members of these communities. According to the NFIP, flood related damages have decreased by almost $1 billion annually in the regions that comply with its regulations. The program requires communities to construct proper drainage systems that can subdue all but the most treacherous floods, making these areas safer and decreasing the amount of property damage caused by this natural disaster. To learn more about flood insurance, visit the official NFIP website at www.fema.gov/nfip/.

On the other side of the spectrum, if you are purchasing a home in California (or surrounding areas) you should consider earthquake insurance. In 1996, the Northridge earthquake killed 50 people and caused over $12.5 billion of damage in California. After this disaster, the California Earthquake Authority (CEA) was created to help homeowner’s obtain earthquake insurance. Typically, the closer your home is located to a fault line, the higher your premium will be, but it’s a good idea to spend the extra money if your home is at risk for earthquakes. To find out more information about earthquake insurance visit CEA’s website at www.earthquakeauthority.com.

When exploring flood or earthquake insurance, remember to investigate your new home’s location thoroughly. If your community is at risk for either of these disasters, you will want to purchase the proper insurance. You will never regret the money spent on this type of coverage and there are still plenty of other ways to save money on homeowner’s insurance while getting the policy you need.

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