KNS Financial

Personal Finance From a Biblical Perspective

Why You May Need Natural Disaster Insurance

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Although most homeowners have a basic homeowners insurance policy, or even home contents insurance, many do not have natural disaster insurance. However, with the recent destruction from Hurricane Irene and Hurricane Lee, the importance of being fully covered has been made clear.

Why You Need Natural Disaster Insurance

If you only have a standard homeowners policy, you’re not covered for damage to your home or possessions in the event of an earthquake. This includes the damage occurring from the shaking and cracking associated with earthquakes and aftershocks. You would have to take out a separate earthquake insurance policy in order to be covered.

According to the Insurance Information Institute, many standard homeowners policies will cover you for direct losses due to fire, lightning, tornadoes, wind storms, hail, explosions, smoke, vandalism and theft. However, the limits may not be enough to fully cover all of your damages.

Many policies will also limit the amount of coverage due to damage from hurricanes and other windstorms as well. It is best to contact them ahead of time and find out exactly what your coverage entails. Then make sure that you follow a hurricane preparedness guide in order to minimize damage.

Flood damage is not included in your homeowners policy, so you will have to take out natural disaster insurance if you live in a flood-prone area. Flood insurance is actually provided by the federal government, and administered by the Federal Insurance Administration. Flood insurance also covers the damage that you incur as a result of a mudslide.

Another thing to consider is having the proper motor insurance. Many times we only focus on our homes, but many people have their cars destroyed during natural disasters; so it makes sense to ensure that you have the proper coverage ahead of time.

How Much Natural Disaster Insurance Do I Need

Like most types of coverage, if your home is destroyed, your natural disaster insurance policy will pay you for the “actual cash value” of your home (the replacement cost minus depreciation). The key is to make sure that your coverage amount will be enough for you to rebuild.

It would be wise to do some research on building costs before you choose your amount. One thing to keep in mind is that costs may be inflated (you may even have to deal with price gouging) because of the increased demand for contractors and building materials after a natural disaster!

Also, be sure not to use the purchase price of your house as a basis for your calculation. The market price of your house includes the value of the land on which the house is situated. Most likely, the land will still be there after a disaster, so it would be a waste of money to include its value in your coverage calculation.

What About An “Acts Of God” Insurance Policy?

The term “acts of God” is not specifically mentioned in homeowners policies, so it can mean different things to different people. However, it is usually used to describe natural disasters (such as tornadoes, earthquakes, and hurricanes) as opposed to man-made destruction such as theft and negligence.

Therefore, you will not be able to find a specific “acts of God” insurance policy, but you will be able to cover yourself by purchasing natural disaster insurance. While you’re checking into all of this coverage, be sure to get a few life quotes as well. The most tragic part of any disaster is the loss of life – especially when a family is left behind with nothing.

photo by U.S. Fish and Wildlife Service – Northeast Region

How To Replace Or Exchange Your Damaged Money

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Have you ever washed your jeans, only to later discover that you left a wad of cash in them? Maybe the fact that this doesn’t happen to plastic should be added to my list of credit card benefits! If your cash has been ruined beyond repair, don’t just throw it away (hmm…I wonder if I’ve done that before)! The Bureau of Engraving and Printing will take your damaged money and damaged currency and possible replace it for you.

According to the Bureau’s website:

The Bureau of Engraving and Printing redeems partially destroyed or badly damaged currency as a free public service.

Every year the U.S. Treasury handles approximately 30,000 claims and redeems mutilated currency valued at over $30 million.

The Office of Financial Management, located in the BEP, uses experts to examine mutilated currency and will approve the issuance of a Treasury check for the value of the currency determined to be redeemable.

Here is a video that demonstrates how these experts examine and attempt to recreate the damaged money:

How To Exchange Your Damaged Money

Shipment Of Damaged Or Mutilated Currency

Damaged, or “mutilated” currency may be mailed or personally delivered to the Bureau of Engraving and Printing. When mutilated currency is submitted, a letter should be included stating the estimated value of the currency and an explanation of how the currency became mutilated.

Each case is carefully examined by an experienced mutilated currency examiner. The amount of time needed to process each case varies with its complexity and the case workload of the examiner.

The Director of the Bureau of Engraving and Printing has the final authority for the settlement of mutilated currency claims.

Although Treasury examiners are usually able to determine the amount and value of mutilated currency, careful packaging is essential to prevent additional damage.

Procedures For Packing Damaged Currency:

  • Regardless of the condition of the currency, Do Not Disturb the fragments any more than absolutely necessary.
  • If the money is brittle or inclined to fall apart, pack it carefully in plastic and cotton without disturbing the fragments and place the package in a secure container.
  • If the currency was mutilated in a purse, box, or other container, it should be left in the container to protect the fragments from further damage.
  • If it is absolutely necessary to remove the fragments from the container, send the container along with the currency and any other contents that may have currency fragments attached.
  • If the currency was flat when mutilated, do not roll or fold the notes.
  • If the currency was in a roll when mutilated, do not attempt to unroll or straighten it out.

As you can see from the video, they go through a lot of detailed work to ensure that they are reimbursing people for the correct amounts. Therefore, I can understand all of the guidelines regarding how you pack and ship your damaged money.

How To Exchange Damaged Or Mutilated Coins:

If coin or any other metal is mixed with the currency, carefully remove it. Any fused, melted, or otherwise mutilated coins should be sent to the U.S. Mint at following address for evaluation:

Superintendent
U. S. Mint
Post Office Box 400
Philadelphia, PA 19105

For cases that are expected to take longer than 8 weeks to process, the Bureau of Engraving and Printing will issue a written confirmation of receipt.

Mutilated Currency Mailing Address:

Bureau of Engraving and Printing
MCD/OFM, BEPA
Room 344A
P.O. Box 37048
Washington, D. C. 20013

All mutilated currency should be sent by “Registered Mail, Return Receipt Requested.” Insuring the shipment is the responsibility of the sender.

Personal deliveries of mutilated currency to the Bureau of Engraving and Printing are accepted between the hours of 8:00 A.M. and 2:00 P.M., Monday through Friday, except holidays. The BEPs Office of Compliance, Mutilated Currency Division is located at 14th and C Streets, SW, Washington, DC.

To obtain information about your mutilated currency shipment, please contact the Mutilated Currency Division using any of the following numbers:

(866) 575-2361 (toll-free)

photo by Suburban Dollar

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