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Five big insurance gaps could cost you

By ALEX GLENN NerdWallet

You might think you have airtight insurance protection against storms, car accidents and other mishaps. But you'd hate to discover hidden cracks in your coverage once it's too late.

Here are five insurance problems you might not be as prepared for as you think -- and how to plug the coverage gap.

No flood insurance

Flooding has occurred in every state in the country over the past five years, according to the Federal Emergency Management Agency. Yet only 12 percent of homeowners nationwide carry flood coverage, an Insurance Information Institute poll found.

Homeowners insurance doesn't cover flooding; you'll need a separate policy. You can find local agents through the National Flood Insurance Program. You can also ask your home insurer for help starting a policy through the federal program, or whether there are companies in your state that offer private flood insurance.

There's a 30-day waiting period before coverage kicks in, so get flood insurance squared away well ahead of coming storms.

No way to pay off a lease or loan on a totaled car

Gap insurance helps you avoid owing money on a car loan or lease even if your vehicle has been totaled or stolen. Along with comprehensive and collision coverage, gap insurance is a smart addition if you lease or finance a car.

Say you lease a $20,000 car at payments of $400 a month. Five months later, your car is totaled in an accident. If the car's value has dropped to $15,000, that's the amount your collision claim check will be, minus your deductible. That won't be enough to cover the $18,000 left on your lease.

This is where gap insurance kicks in. It makes up the difference between what your car is worth when it's stolen or totaled and how much you owe on a car loan or lease.

3. No plan for sewage backups

You may not realize that you're responsible for the sewer line that runs from the main pipeline in the street to your house. Yet standard home insurance typically doesn't cover backups in this part of the line. Enter sewer backup coverage. It pays for cleanup and repairs from spewed sewage in your house.

Sewer backup coverage is relatively affordable -- $40 to $50 a year, according to the Insurance Information Institute. Talk to your home insurer about adding this kind of coverage.

4. No income after a disability

Among 20-year-olds, more than 1 in 4 will suffer a disability before retirement age, according to the Social Security Administration. If you aren't able to work because of an illness or accident, you need a plan to pay the bills.

Social Security disability insurance is available only to people with long-term disabilities lasting at least one year. Some employers offer short-term disability insurance, but it isn't as common as you might think. You don't have to rely on your workplace for coverage. Individual disability insurance is available from several insurers, such as State Farm, MetLife and Mutual of Omaha.

5. No financial safety net for earthquakes

Most homeowners, even those who live in high-risk areas, go without earthquake insurance. They risk financial ruin if their homes and belongings are destroyed. Only 10 percent of California residents have earthquake insurance, and 14 percent of people in western states, according to the Insurance Information Institute.

Standard homeowners insurance won't pay to fix damage caused by earthquakes. Home insurers might offer earthquake coverage as a policy add-on for an extra cost -- and in California they're required to. Or you might need to look for stand-alone earthquake insurance.

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