The 411

The approach of a hurricane is an awful time to discover that your home may not be adequately covered by insurance. Once the federal government issues a tropical storm or hurricane watch, insurance companies don’t allow homeowners to obtain new or additional insurance coverage.

Instead of nervously checking your insurance documents in the midst of hunkering down for a storm, you should make sure your home insurance needs – which may include homeowners, windstorm and flood coverage – are met well before hurricane season (generally June through November) arrives…preferably at the beginning of the calendar year.

This should include reviewing your policies to understand what’s covered, and filling in any gaps you find. It’s also wise to become familiar with your various insurance deductibles and other out-of-pocket expenses that a policy may require if a hurricane damages your home. Starting this process before hurricane seasons gives you time to start an emergency fund to cover these costs if necessary.

1. Does homeowners insurance cover damage from a hurricane?

No one insurance coverage can cover all of the possible damage a hurricane can cause to your home. Instead, you may need a mixture of policies – home, wind and flood – to be fully covered.

Where you live can impact your hurricane insurance needs. A standard home insurance policy covers damage caused by windstorms, hurricanes and hail in most of the U.S., provided you don’t waive the coverage. But if you live near the coast, you may be required to purchase a separate windstorm policy or wind and hail insurance to receive protection for damages from wind or wind-blown water.

You may also need to buy windstorm insurance if your home insurance is a named-peril policy that only covers listed dangers, such as theft and fire.

Having coverage through your home policy or the windstorm rider allows you to make claims for storm damages, such as:
• Blown off shingles
• Downed trees
• Windows shattered
• Rain entering your home as a result of wind damage (such as roof damage or broken windows)

If a hurricane causes flooding, your homeowner’s insurance won’t cover the ensuing damages. Rising water – in effect, any water that enters the home from the ground – is considered flood water. Flood water is only covered by a separate flood insurance policy.

You should evaluate your homeowner’s coverage to make sure your home and personal belongings are insured for the amount it will cost to replace them. If the hurricane destroys your home, your home insurance policy will cover you for additional living expenses. Your homeowner’s insurance won’t cover hurricane-related damage of your automobiles. Instead, your car insurance’s comprehensive coverage (provided you have such coverage) would handle that protection.

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2. Do I need flood insurance?

You need flood insurance if you’re likely to need coverage for water that enters your home from the ground. Your home or windstorm insurance won’t cover damage resulting from:
• A storm surge
• Pooling of water due to heavy rain
• Water from a swollen creek, river or lake

If the ground is saturated, and the water rises or seeps into your home, it’s considered a flood by insurers.

The flood-damage exclusion in standard homeowners policies often comes as an unpleasant surprise to victims of rising waters.

“This is the biggest misunderstanding that homeowners have,” says Michael Barry, a spokesperson for the Insurance Information Institute (III). And it only gets worse if there is a dispute after a storm if the water intrusion was the result of wind damage (blowing in water) or flooding.

“You want to get a flood insurance policy, so there’s no dispute over the origins of the water damage,” says Barry.

Flood damage can be very costly to repair. As a result, private insurers largely have dropped that coverage. Instead, the government-backed National Flood Insurance Program (NFIP) offers flood insurance.

Here are some key things to know about the NFIP:

• A flood policy comes with a 30-day waiting period from the time of purchase before it goes into effect. In other words, don’t wait until a hurricane is developing in the Atlantic Ocean before getting insurance.
• Building property (structure) coverage tops out at $250,000 for residential buildings ($500,000 for commercial).
• Personal possession coverage is capped at $100,000.
• Damage to basement improvements, decks, pools, walkways, trees or shrubs (landscape) is not covered.
• Additional living expenses you incur due to losing the use of your flooded home – such as hotel and food expenses – aren’t covered by this flood policy.

Supplemental flood policies are also available from some private insurance companies around the country. However, you can only buy excess flood insurance, which comes with much higher limits, after you have purchased a base NFIP flood policy.

3. Are there special hurricane deductibles I must pay?

Yes, if you live in a hurricane-prone area. To limit their losses, insurance companies in coastal states have homeowners take on more of the risk by attaching higher, percentage-based deductibles for hurricane damage instead of a flat-dollar deductible.

According to the III, 19 states and the District of Columbia have hurricane deductibles: Alabama, Connecticut, Delaware, Florida, Georgia, Hawaii, Louisiana, Maine, Maryland, Massachusetts, Mississippi, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, South Carolina, Texas, and Virginia. Those coastal states are also most likely to suffer from hurricane damage.

A “trigger” event puts hurricane deductibles into effect. Triggers vary by state and insurance company.

For example, in Connecticut the legal trigger is when the National Weather Service (NWS) declares a hurricane that records winds of 74 miles per hour or more anywhere in Connecticut. The hurricane deductible remains in effect until 24 hours after the last hurricane warning terminates for any part of the state or 24 hours after the hurricane is downgraded from a hurricane by the NWS.

Remember, your deductible is the amount you pay out-of-pocket before your insurance kicks in. Hurricane percentage deductibles typically run from 2 percent to 5 percent of your home’s insured value. They can be even higher. For instance, Florida allows up to 10 percent. So, these costs can be significant.

Let’s look at an example. Say your home is insured for $350,000 with a 2 percent hurricane deductible. This would make you responsible for the first $7,000 of repairs. A 5 percent deductible would push it to $17,500.

In Florida, your hurricane deductible is applied on an annual basis. This means if you had to submit multiple claims due to multiple storms, you’d only have to meet the hurricane deductible once a calendar year. Once you reach the hurricane deductible, the insurer can only apply your normal home insurance deductible, which is typically a flat amount and significantly lower.

“Deductibles vary from company to company and state to state, so everyone needs to read their policy or speak to an agent or company representative to find out exactly what the hurricane deductible is and when it applies,” Salvatore says.

You should find your deductible information on the declarations page of your home or windstorm policy.

4. Is my home covered if I leave it during the hurricane?

The same home, windstorm and flood insurance coverages apply whether you stay or evacuate your home. You should, however, prep your home if you flee from the storm (and remember to take insurance paperwork with you so it can’t be damaged or go missing in the hurricane).

If you have storm shutters, put them on or use plywood to cover the windows. If it’s safe to do, move loose outdoor items inside, such as patio furniture, potted plants and garbage cans, so that they won’t become flying projectiles.

It’s also wise to unplug appliances and turn off electricity and the main water valve. If you’re ordered to evacuate or you leave on your own, make sure you tell someone — a friend or relative not in the storm-affected area — where you are going. And don’t forget to take your emergency supplies, warm clothing, blankets and sleeping bags.

Expenses incurred for evacuating aren’t covered by your insurance. However, if you come home and find your home unlivable due to covered hurricane losses, then additional living expenses are covered by a standard homeowner’s policy.

5. What should I do after the storm hits?

Once it’s safe to return home, you should promptly do so. Document the damage, with photos or video if possible, and take measures to prevent further damage to your home. For example, if a window is broken, seal it to prevent more water from coming in. If you have a hole in your roof, place a tarp over it.

If you fail to take reasonable measures to stop damage from occurring after a storm, your insurance company may refuse to pay for the added costs.

Keep a record of any temporary repairs you make and save receipts for all expenses, such as buying plywood and nails to board up a broken window, in case your insurer will reimburse you as part of your claim.

Here are some additional claim tips:
Immediately notify your insurance company of your loss and submit a claim. Insurance companies and their adjusters may be swamped with claims after a storm and you don’t want to be at the bottom of their lists. Promptly provide any documentation your insurer asks for to keep the claim moving along.
Take inventory of your personal possessions and property. The easiest way to do this is to compare your inventory list that you prepared before the disaster to your new list – before-and-after photos and video are very helpful to insurers. Collect any receipts or proof of payment that proves the value of damaged items.
Keep detailed records. Document your conversations and insurance contact information. Make sure to jot down your adjuster’s name and contact information. List the dates, times and descriptions of your conversations with your insurer, adjuster, and those repairing your home.
Obtain repair estimates from trusted contractors. Get written bids – including details of materials to be used and prices on a line-by-line basis – from licensed contractors. This can speed up the claims process. Permanent repairs shouldn’t be made until insurers have inspected your losses. Keep all damaged personal property until an insurance settlement has been reached.
Keep receipts. If you make temporary repairs or have to relocate from your home while it is being repaired, keep records of your expenses since they’re likely to be covered by your homeowner’s insurance policy.
Negotiate. If you don’t think you’ve been offered a fair settlement, don’t be afraid to negotiate with your insurer. If you can’t come to an agreement, you can take action by consulting an attorney or hiring a licensed public adjuster to act on your behalf. You can also contact your state’s insurance regulator to check on your consumer rights and make a complaint if necessary.

Our dedicated and experienced team at Larry Moskowitz, PA reminds you to be diligent and prepared about storms that may affect your area in the near future. We want you and your family to be safe.

If, in the event of a storm, you experience damage to your home or business property, call us today (844) 849-0760 for a FREE case evaluation.

Our firm has recovered millions for clients who have been wronged by their insurance company’s improper denial of insurance coverage or underpayment of insurance benefits owed. We’ll work aggressively to get you what you deserve.

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