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Hurricanes and Home Insurance

home insurance

Do you own a home in an area that’s at risk for hurricanes? If so, you’ve likely thought through the steps you’d take if you had to stock up on supplies for a few days stuck at home or, in a worst-case scenario, evacuate before a particularly dangerous storm. While your family’s safety is the No. 1 priority, it’s also important to protect your investment in your home. What would happen if a hurricane were to damage severely or even destroy your house?

Many homeowners living in these at-risk areas aren’t sure if hurricane insurance is really worth it. Learn more about how this type of home insurance works and what it covers in the event of a hurricane.

What Kinds of Damage Will a Hurricane Cause?

The most significant damage resulting from a hurricane is typically related to flooding. Heavy rainfall and storm surges can cause serious water damage to homes, completely ruining thousands of dollars’ worth of your possessions. While it is heartbreaking to lose treasured photos or family heirlooms, you could also face a huge challenge in replacing clothing, furniture, and other household essentials. The excess water could lead to further problems if a sewer backup occurs.

High winds from a hurricane can batter your home or cause outdoor items to blow away. Hurricanes and tropical storms may even spawn tornados once on land.

Will a Homeowner Policy Cover Hurricane Damage?

homeowner policy

In most cases, your homeowners insurance policy will not cover hurricane damage. This is especially true for those with homes and condos in high-risk zones. These areas are more likely to suffer damages from a hurricane, so the insurance coverage from a typical homeowners insurance policy may be more limited as a result.

If you’re not sure what your homeowners policy covers, read through the details of your policy and contact your insurance agent to clarify any questions you might have.

Do I Need More Than One Insurance Policy?  

Flooding is never covered on a standard homeowners insurance policy, so you will need to get a separate floor insurance policy if you’re in an area that’s at risk for hurricane damage. You can get this through the National Flood Insurance Program. Renters can also get policies through this program. In some areas, getting flood insurance isn’t optional. You may be required by U.S. law or your mortgage lender to purchase a flood insurance policy if you purchase property in a high-risk flood zone.

In addition, most hurricane-print states won’t cover wind damage. Ask your insurance agent about adding a windstorm endorsement to your current homeowners policy. Depending on what they are able to offer, you may also want to purchase a separate windstorm insurance coverage policy.

You may also be able to add a sewer backup endorsement to your homeowners policy. Keep in mind you will also need to have a separate flood insurance policy to allow this added coverage to kick in if the sewer backup is a result of flooding.

How Does Flood Insurance Work?

The average premium for flood insurance is $672 per year. However, those who live in high-risk areas may have to pay thousands of dollars annually, since the risk of severe flooding damage is much higher.

Make sure you get a deductible amount that you can handle. This amount is how much you’ll have to pay before your insurance company can cover a claim.

To file a claim, contact your insurance company as soon as the weather conditions are safe. The company will have a claims adjuster assess the damage. You may need to provide photos, receipts, or other details about the damage to your home and possessions. Based on what is covered and the limit for your policy, the NFIP will inform you how much you’ll receive in monetary assistance. While you may receive enough money to repair or replace your home, you will likely only get the actual cash value (the depreciated monetary value) for any possessions that were lost.

What If I’m Uninsured?

If you don’t have flood insurance for your home, you’ll have to pay for any losses on your own. You may be able to apply to the Federal Emergency Management Agency (FEMA) to get a disaster grant. The average grant amount is about $5,000 per household. When you compare this amount to the average flood insurance claim of $30,000, this may not be nearly enough to cover the damage to your home. In fact, many homeowners have to use part of their grant money to cover other disaster-related expenses, including hotel stays or short-term rentals.

You may be able to apply for a low-interest disaster loan through the Small Business Administration (SBA). These loans are available for up to $200,000, and the funds can be used to repair or replace a primary residence. Additionally, renters and homeowners can apply for up to $40,000 in SBA disaster loans to replace their damaged or destroyed possessions, including appliances, automobiles, furniture, and clothing. Since these loans must be paid back in a timely manner, avoid borrowing more than you can afford in the long run.

Don’t Wait Until It’s Too Late!

There is typically a required waiting period after you purchase a flooding insurance policy, windstorm insurance policy, or added endorsements for your homeowners insurance. The coverage won’t kick in until this waiting period has lapsed. Some insurance companies will even stop offering these policies for sale once a storm is named, so don’t wait until a storm is imminent to get these additional policies or endorsements. The best time to get extra insurance to help with hurricane damage costs is well before hurricane season begins.

The prospect of a hurricane damaging your home is quite scary. One way to alleviate some of your fears is by making sure you have adequate coverage for your home and your possessions. If a strong storm were to hit, you’ll be able to focus on the safety of your loved ones rather than worrying about the astronomical costs of replacing or repairing your home. To get the insurance coverage you need, contact an insurance agent to inquire about policy endorsements and separate flood and windstorm policies.

Resources:

https://www.thebalance.com/hurricane-damage-insurance-and-claims-coverage-4150506

https://www.forbes.com/sites/jordanlulich/2018/06/29/hurricane-insurance-is-it-important-why-do-you-need-it/#4c1e841159fc

https://www.nerdwallet.com/blog/insurance/hurricane-insurance/

https://www.fema.gov/national-flood-insurance-program

https://www.usatoday.com/story/money/2018/09/14/hurricane-florence-how-flood-insurance-works/1306095002/

https://www.builddirect.com/blog/hurricane-protection-for-your-home-inside-and-out/

https://www.builddirect.com/blog/the-whys-hows-of-home-insurance/

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