Homeowners, be prepared for another dangerous hurricane season. The National Oceanic and Atmospheric Administration forecasts three to five major hurricanes, among a total of 13-20 named storms.
Now is the right time to act if you are in a hurricane area. While you can’t stop a hurricane from destroying your home, having the right insurance can protect you financially in case of an emergency. These are the steps you can take to ensure you have the hurricane coverage that you need. You will also get paid if your house is damaged.
Get the right policy
One insurance policy won’t cover all kinds of hurricane damage. Flood damage is not covered by most homeowners insurance policies. You will need flood insurance.
Do not wait for a storm to pass before you get flood insurance. It can take up 30 days to put in effect a new policy.
Flood insurance might not be necessary if your mortgage lender does not require it, and your home isn’t located in a “special flood hazard zone,” the Federal Emergency Management Agency’s designation for high-risk flood areas. Camille Garcia, director of communications, public affairs, at the Insurance Council of Texas, said that it is still worth looking into. She points out that most of the flood-prone flood zones in Texas were not included in the list of homes that were affected by Hurricane Harvey.
Wind is another common cause of hurricane damage. Although most homeowners policies include wind damage coverage, some areas may not be covered by standard policies. Joe Meisinger is the chief underwriter and head of national products at Travelers. You may need a separate policy for windstorms in these areas.
Don’t forget your car. You will need comprehensive coverage to cover flood damage. This optional coverage type is available. Ask your agent if you have it.
Make sure you know your coverage limits
Garcia says that many people have lived at home for the last year and done a lot DIY projects. Garcia says if this is you, make sure your agent knows. If you have made major home improvements, Garcia explains that you may need to raise your policy limits in order to be fully covered.
Another reason why you may need more coverage is that it might now cost more to repair or rebuild your house than when you purchased the policy. Garcia states that the housing boom has caused both the labor and lumber costs to rise significantly. A hurricane can cause havoc in a region and increase costs because of the high demand for contractors and materials.
Ask your insurer for extended replacement coverage to ensure that your dwelling coverage is sufficient to rebuild your house. If rebuilding costs exceed your dwelling limit, your insurer will pay an additional amount.
Meisinger describes it as a “security blanket.” It provides extra security in the event of an accident or if you don’t know how to calculate.
Assess your deductibles
A hurricane claim can be more expensive than other claims for some homeowners.
Jessica Hanna, senior vice-president of public affairs at American Property Casualty Insurance Association (an industry trade association), says that if you live in a hurricane-prone region, you might have a separate hurricane deductible.
Meisinger points out that separate deductibles can be applied to hurricanes, named thunderstorms, wind and could be either a fixed dollar amount, or a percentage, of your dwelling coverage.
Consider, for example, a policy with a $250,000 limit on dwelling coverage and a 2% hurricane deductible. Your insurance company would only pay for $5,000 of damage before you would be responsible for any subsequent hurricane-related claims.
Remember that damage caused by a single storm may result in multiple deductibles. Garcia says, “Let’s suppose the wind blew off your roof but there is also flooding in your home.” Two claims would be required: one with your homeowner or windstorm insurance and one with flood insurance. This means you will need to pay both the deductible and the actual amount.
While raising deductibles may save money on your premiums it could also backfire if you don’t have enough cash to pay the deductibles in an immediate situation.
Take a look at your home and make a list
Imagine returning home from a hurricane to find a heap of rubble. Would you be able to recall every piece of kitchen equipment or shoe that has been damaged?
Save yourself the trouble by creating a home inventory before you need it.
Hanna suggests that you use a smartphone to capture photos and videos of all your belongings. This includes… furniture, appliances and jewelry. Hanna recommends that you upload the files to a cloud storage service for quick access.
Prepare for a Hurricane No matter what you do, don’t wait. Garcia believes that preparation is the key to protecting your family, finances, and home.