The last few years, mortgage brokers in the Rockingham, Kwinana and Cockburn areas have seen their share of home loans being refinanced because of damage from natural disasters, such as storms and bushfires. We have no control over when or where a natural disaster is going to happen but we can make intelligent and informed decisions that can help us mitigate the damages.
It seems that 2013 has been a particularly devastating year already, with flooding on the East Coast and bushfires across Australia. Some people have no homes to return to, while some are stuck with massive damages to their homes.
This is devastating, not only emotionally, but financially. We can often lose many of our possessions, some of which contain our most cherished memories. Worse yet, if we are underinsured, it can cause a financial setback which takes us years to recover from. For many of us, our homes are the biggest investment we will ever make in our lives,and are emotional grief is compounded by financial difficulty.
After a disaster, we ask ourselves what our home is worth now, what it will cost to make repairs. Sometimes the damages are less than we thought but sometimes they are much worse. Ultimately, we must decide whether to stay, refurbish or simply walk away.
So what can you do when disaster strikes? The first people to call, besides your attorney, are your banker and your insurance company. The lender who wrote your home loan should have procedures in place for natural disasters and your payments can often be stopped on a temporary, emergency basis.
You will, of course, have to talk to your insurance company but the best way to make sure that you receive adequate payment is to make sure you are fully insured before disaster strikes. You must make sure your insurance coverage is complete, this includes reading all of the fine print.
Furthermore, we heartily recommend that you hire an attorney to go over your insurance policy before you sign it. This can save you untold amounts of money if it is your home that is on the news after a flood, a typhoon, or a bushfire.
Ultimately, the old saying is still true: better safe than sorry.