Your guide to hurricane insurance: what you need to know
Oct 13, 2020
Posted by: ClimaGuard Team
Do you know what’s included in your home insurance policy? You should, it could make the difference between losing a home and repairing one.
As we’re sure you’re already aware, hurricane season in the United States takes place between the 1st of June and the 30th of November every year, give or take a few days. Therefore, it’s essential to check your homeowner insurance or renters policy now, making sure you’ve got the right coverage in place should a hurricane hit and cause significant damage to your property.
This article will discuss homeowners and renter’s insurance in regards to storms, more specifically, hurricanes - here’s what you need to know.
Check your existing coverage
Regular homeowner’s insurance, in the event of a hurricane or other storm, will cover the structure of your property. However, it is essential that you understand the different components that may impact that final insurance payout after a hurricane, ensuring you receive enough money to carry out repairs and renovations if required, not to mention costs to live on.
The cost of rebuilding, repairing, or restoring a home is based on a variety of factors. It’s also worth noting that the real estate value of a house is not the same as the costs to rebuild a house - these are two entirely separate figures. Therefore, it’s essential to adjust your policies accordingly, providing yourself enough compensation for repairs.
You can do this by contacting your insurance provider, letting them know of your situation, and what would happen in the event of significant hurricane damage to your property.
Understanding the deductibles
As hurricanes are most common in coastal states such as Texas and Florida, insurance providers issue separate deductibles for both hurricanes or windstorm homeowner policies.
A deductible for a hurricane is applied only to hurricanes. On the other hand, windstorms are deductible regarding any type of wind (including hurricane damage). To find out whether or not your homeowner insurance policy has a hurricane deductible, this will be clearly stated, addressing what would cause the deductible to go into effect. Once again, if you’re unsure whether or not this is included, contact your insurance provider to find out more information.
As opposed to regular “dollar deductible” on a homeowner’s insurance policy, both hurricanes and windstorms are usually addressed as a percentage, usually from 1 to 5 based on the value of the structure of your property (not market value).
Furthermore, for unfortunate homeowners who live in areas greater prone to hurricanes (e.g. Texas and Florida), the deductible may be a higher percentage. However, this ultimately depends on what insurance provider you are with, the state you live in, and whether or not you pay additional money in the form of premiums for a lower deductible rate.
What’s not included?
Regular homeowner insurance policies cover damage from hurricanes, wind, fire, explosions, lightning strikes, and other disasters. However, flooding is generally not included. Often, people underestimate this risk, but if you live in a flood zone or an area where hurricanes are likely, then purchasing a separate flood insurance policy is something you should seriously consider.
Also, sewer backups are usually not included within general homeowner insurance coverage. However, sewer backups are common during flooding and hurricanes, so it’s definitely worth investigating to see whether or not it’s worth it for you.
Furthermore, if you’re not entirely sure what’s included and what’s not included within your homeowner insurance policy, it’s best to speak to your insurance providers (who would have guessed).
Coverage for living expenses - is there enough?
Alongside insurance coverage for the structure of your home in the event of a hurricane, what about living expenses? What if you need to live somewhere else in the meantime because your home is uninhabitable?
Additional living expenses cover the cost of hotel bills, restaurant meals, and other expenses that you are not responsible for. Often, additional living expenses work out at 20 percent of the homeowner’s insurance coverage on the structure of your home. There are also renters policies that cover these too.
We recommend looking at your living expenses and determining whether or not this is enough to cover you in the event that you cannot live in your own home. Remember, this is to cover hotel nights (likely for multiple people), restaurant meals, and in some cases, transport. If you think this amount is too low, contact your insurance provider and see if they’re willing to adjust this, or if you can get some form of deductible.
Regular homeowner insurance policies cover damage from hurricanes and storms, but do not provide cover against flooding.
Check your policy now to ensure it covers the structure of your home and your living expenses should your home unfortunately become inhabitable and require repairs - this is something you cannot afford to skip out on.