7 deadliest home insurance disasters
By Craig Guillot • Bankrate.com

Think you'll be fine if you're not living in a hurricane zone? Guess again. Insurance companies consider far more than just Southeastern coastal properties to be at risk of natural disasters. From Hurricane Katrina to the tornadoes of the Midwest to the recent floods in the Northeast, the last couple years have been a boon for natural disasters.

Even if a disaster doesn't strike, it's the threat of disaster that is hitting homeowner's pocketbooks all across the country. In many areas, insurance companies are dropping policyholders in order to minimize their exposure, and homeowners lucky enough to remain covered are seeing rates rise almost as fast as floodwaters did in New Orleans during Hurricane Katrina.

According to the Insurance Information Institute, losses from natural disasters climbed to a new record of $27.3 billion in 2004. In 2005 that number was almost doubled by Katrina alone. Here are the seven deadly disasters threatening your home and how your insurance company views them:

1. Earthquakes

Affected areas:
• Far West -- California, Nevada, Washington, Oregon and Alaska
• New Madrid Fault line -- Arkansas, Missouri, Tennessee, Kentucky

Seismic hazard maps by the U.S. Geological Survey, or USGS, indicate that Alaska and California are the most earthquake-prone states. Within the next 30 years, there is a 62 percent probability that an earthquake will occur in the San Francisco Bay area and a 60 percent chance for Southern California.

Earthquakes are generally not covered by standard homeowner's insurance policies, and coverage must be purchased separately. Earthquake insurance is one of the few types of insurance to have gone down in price -- the California Earthquake Authority recently approved a 22-percent rate cut in order to encourage more people to buy earthquake insurance.

In recent years, there has been more attention on the New Madrid Fault line which runs 120 miles from Illinois to Arkansas. According to the St. Charles County Division of Emergency Management in Missouri, there is a 90 percent chance of a quake of a Richter scale magnitude of 6.0 and a 20 percent chance of a 7.5 quake by 2040. An earthquake of 7.5 or greater in that area would be felt throughout half of the United States and could produce damage in 20 states.

2. Floods

Affected areas: Nationwide

Many homeowners, unfortunately, find out every year that floods are not covered by standard homeowners insurance and require a separate policy that can be purchased through the National Flood Insurance Program. Floods represent the No.1 natural hazard in the United States and can strike anywhere. Annual flood losses between 1996 and 2005 averaged $2.4 billion per year.

The average cost of a $100,000 flood insurance policy is approximately $300 per year, but rates can be considerably more in flood-prone areas. Hurricanes and recent disasters have made the public more aware of flood insurance.

"The consciousness of no longer having (flood insurance) because you're in a preferred (low risk) zone is no longer an issue. People are buying it no matter what flood zone they're in now," says Dan Burghardt, an insurance agent from New Orleans. Flood zones are mapped out by the Federal Emergency Management Agency, or FEMA, and are rated according to their risk level. Many residents in low-risk zones frequently bypass flood insurance. Contrary to popular belief, flood insurance is available anywhere in the country (usually through a local agent) and property owners can visit FloodSmart to determine their flood risk. There are approximately 5 million policies in 21,000 communities nationwide.