Storm paths are unpredictable. Insurance client’s reactions to storms are very predictable. The good thing about a hurricane or other weather phenomenon approaching is that it causes people to re-examine and reconsider their current insurance policies and their possible needs. Do I have the right insurance? Do I have enough insurance? What happens if I need to use my insurance?
It’s good for people to be shaken up a bit, because it causes them to reevaluate. So I thought it would be an excellent time for a quick update on floods, hurricanes, and wind, (oh my!)
Does Homeowners Insurance cover damage from a hurricane?
There is no singular insurance policy that can cover all the possible scenarios of damage that a hurricane can cause to your property, your house and your belongings. Most damage that happens during a hurricane is related to wind damage or flood. Your individual Homeowners Insurance should cover lost shingles, trees that toppled onto buildings, total destruction, recovery and rebuild BUT, you need to check the terms of your individual policy to see exactly what that policy will cover. All policies have their own specific terms.
Also, many homeowner policies have special deductibles for hurricane damage that are separate from the general deductible for other damages. While the general deductible is likely set at a dollar amount, the deductible for hurricane damage is often set as a percent of the hurricane costs. It is important to remember that you'll be covered only up to the coverage limits you selected for your policy. You can often raise your coverage limits, though doing so will increase your premium. Any losses that exceed these limits will have to be paid out of your own funds. Also, before your insurer will begin to cover your losses, you'll have to pay whatever amount you chose for an out-of-pocket deductible.
Now is a good time to check your policy limit; is it enough to rebuild your home? Make sure to have enough coverage to completely rebuild your home in the event it is severely damaged or destroyed. Keep in mind, the real estate value of a house is not the same as the cost to rebuild.
Secondly, Homeowners Policies DO NOT cover flooding damage to home and property. It is always a wise choice to invest in a separate Flood Policy. In the insurance industry, “Floods” are defined as” any water that rises from the ground, including tidal waves, as well as destruction from rapid snow melts.” To get reimbursed for water damage, homeowners would need additional Flood Insurance, which is provided by the federal government but can be purchased through an agent or insurance company. Flood Insurance can usually be obtained for a few hundred dollars a year in premium, but always be aware there is a 30 day waiting period until the insurance policy goes into effect. You cannot purchase Flood Insurance when a hurricane is on the horizon.
Now that Hermine has past, without significant damage to the New York Tri-State Area, it is the optimal time to sit down and read your insurance policies. Make certain that they are comprehensive, complete, strong and what you imagine them to be. Make an appointment with your insurance agency and review. See if there are any holes or misunderstandings as to what is and is not covered. Your insurance professional is there for that singular purpose. It is wise to ask them to help you before the weatherman announces the next tropical storm.