Rising temperatures, crowded pools and that smell of grilled hamburgers wafting through your neighborhood can mean only one thing – summer is really here. Unfortunately, summer's arrival means that severe weather could be on the horizon. But we’re not talking here about your typical afternoon thunderstorm. We’re talking about hurricanes.
That’s right, June marks the official start to the Atlantic hurricane season. The National Oceanic Atmospheric Administration’s Climate Prediction Center forecasts a few tropical storms for the East Coast this year, and there’s a 70% chance that three to six could become full-fledged hurricanes. Is your home ready to weather a potential hurricane?
Here are some insurance considerations to address before a storm makes its way into the forecast.
Am I covered?
If you have standard home insurance, you likely have partial protection for damage from hurricanes. However, your policy likely has limits, which means you could suffer from coverage gaps. To make sure you are properly protected, there are a few key policy provisions you’ll want to review.
In the event of any disaster, you want to have enough home insurance coverage to rebuild your home completely if it’s destroyed. Keep in mind, however, that this is the cost to build your home from the ground up, which isn’t the same as your home’s real estate value. You can use a home insurance calculator to help estimate your home’s replacement value and the amount of dwelling coverage you need.
Now let’s get specific to hurricanes. Hurricanes bring two main threats to your home: wind and water. Standard homeowners insurance policies provide coverage for a wide variety of perils, wind included. Hurricane wind speeds can reach 75 to 200 mph, so it’s not a bad idea to double check your policy to make sure that damage from wind is covered. If you live in a coastal state, your homeowners policies may have what’s called a ‘hurricane’ or ‘wind deductible.’
Hurricane deductibles 101
For most covered perils, homeowners are required to pay a traditional deductible before their insurer steps in to help with the claim, up to the policy's limits. Traditional deductibles are usually set at a dollar amount such as $500 or $1000.
Hurricane deductibles are set at a percentage of your home’s insured value. So let’s say your home’s insured value is $200,000 and the hurricane deductible on your policy is set at 5%. In the event a hurricane destroys your home, you would pay $10,000 out-of-pocket before your insurer would help with the rest.
Keep in mind, the details of hurricane and wind deductibles can differ depending on your provider and the state you live in. Not sure if you have a hurricane deductible on your policy? Call your insurance company to get the details on your policy.
Consider flood insurance
We’ve already discussed wind, but what about water? Hurricanes can cause powerful storm surges and excessive rain, both of which can result in flooding. Unfortunately, flood damage is one of the perils not covered by standard home insurance policies. Instead, you’ll need to purchase a separate flood insurance policy, typically through the National Flood Insurance Program.
For many homeowners, purchasing a flood insurance policy is a requirement of their mortgage agreement. However, not all homeowners are required to purchase it.
Thinking about skipping out on a flood policy? Think again. Even if you are in a moderate- to low-risk flood zone, you could be vulnerable. In fact, according to the NFIP, people mapped outside of high-risk flood areas file nearly 25% of all flood insurance claims and receive one-third of all Federal Disaster Assistance for flooding. The NFIP also lists hurricanes as a common and often overlooked cause of flooding. To learn more about flood insurance, visit FloodSmart.gov. Remember, it takes 30 days for flood policies to take effect, so you can't wait until a threat is imminent. And about that federal disaster assistance. It usually comes in the form of loans, which means you have to pay it back.
Mitigate your risk
Along with a comprehensive home insurance policy and flood insurance, it’s never a bad idea to take steps to mitigate risks around your property before a storm strikes. Things such as reinforcing your garage door, repairing loose or missing shingles on your roof, covering your windows with storm shutters or plywood and clearing your property of potential projectiles can all help lessen potential hurricane damage.
For more hurricane preparation and disaster preparedness tips, check out this natural disaster guide, which also offers tips for dealing with tornadoes, floods and lightning.
Samantha Alexander writes for HomeownersInsurance.com, an online insurance resource for homeowners and drivers across the country. Offering comparative automobile and homeowners insurance quotes, consumers rely on HomeownersInsurance.com for the most competitive rates from the top-rated insurance carriers in the country. The HomeownersInsurance.com blog, Square One, provides tips and advice on a range of financial topics to help homeowners and homebuyers make educated decisions about their insurance purchases.
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