A holiday for insurance? Yep, you read that right. While you don’t get the day off work, National Insurance Awareness Day (June 28) serves as an important annual reminder to review your current policies in place, identify any potential gaps in your plans and update your coverage.

This can give folks the peace of mind knowing they’re financially prepared for whatever Mother Nature throws their way in the next year. It’s especially important since natural disasters in 2022 totaled $165.1 billion in damages in the U.S. With household budgets already tight due to inflation, insurance policy gaps can leave homeowners left covering the costs where insurance falls short. And that can lead to financial ruin for many people across the country.

Let’s take a closer look at homeowners and renters insurance this National Insurance Awareness Day with some practical tips on how to ensure you have the best policy in place.

Break down your current policy

You may not know what to immediately look for when reviewing your insurance policy, but unfortunately, it may contain loopholes and exemptions that could leave you holding the bag post-disaster.

When you’re examining your current plan, keep your eyes peeled for terms like “exclusions,” “limits of coverage” and “eligibility.” Those words should set alarms off in your head because they typically mean that your provider won’t cover the costs of certain perils or damage.

Another item to watch out for is if there’s a special deductible included in your policy. Certain deductibles exist for folks who live in areas that are high-risk for disasters like earthquakes or hurricanes. Oftentimes your deductible may be different and higher when filing a claim after one of these disasters hit.

Mind the gap(s)

Many folks assume their insurance policy covers everything Mother Nature could throw at them, but that simply isn’t the case.

Here’s a list of some of the most common gaps in homeowners insurance that leave you covering the cost of repairs, displacement and more:

  • Natural disaster coverage. Did you know that not all natural disasters are covered by a homeowners policy? Earthquakes and storm surge caused by a hurricane, for example, are often left off the list.
  • Anti-concurrent causation. This is a very fancy way to say: If two disasters happen at once, then only one will be covered by insurance. That leaves homeowners with the responsibility to cover the damage of the other severe weather event.
  • Depreciation is calculated in your payout. Some parts of your home, say your roof or windows, depreciate in value over time. So, when they’re damaged in a disaster, insurance companies often only pay out a fraction of the actual cost to repair them. The average home is underinsured by 22%, with some underinsured by 60% or more, leaving homeowners with high replacement costs even when their home is covered.
  • Disaster deductibles can be high – and inconsistent. Deductibles can range anywhere from 5-30% of your home’s insured value. Sometimes, they’re even higher for wind-related damages (think hurricanes and tornadoes) for people who live in high-risk locations.

By going through your policy with a fine-tooth comb, you’ll have a better handle on the gaps in coverage…But how do you fill the gaps?

Enter disaster insurance

Disaster insurance like Recoop is here to be your safety net when tragedy strikes. Our multi-peril disaster insurance product is designed as a supplemental plan that pays a lump-sum cash benefit up to $25,000 in the event of a covered natural disaster.

Best of all, it comes with no strings attached. The funds are 100% flexible, so you can fill in the gaps where typical homeowners or renters policies leave you hanging. This way, you get the recovery cash you need – usually within days.

So, this National Insurance Day acts as a reminder to take action and ensure you’re equipped with adequate protection for whatever Mother Nature has in store. By taking the time to evaluate your coverage, locate any gaps in your plan and potentially tacking on a multi-peril disaster policy, you’ll not only safeguard your financial well-being but enjoy peace of mind.