With hurricanes, you do not always have advance notice of when they are coming. Compared to other natural disasters, a few days to a few hours of hurricane preparation could be the difference in the amount of property damage your home sustains and even the difference between life and death.
But, preparing your home does not have to stop at boarding up the windows and securing items outdoors. Making sure your homeowners insurance covers hurricane damage is often a recommended first step to take. A standard homeowners insurance policy protects your home against some natural disasters, but not all. The flooding and storm surges that occur with hurricanes are typically not included in a standard policy. You may need to purchase an endorsement or a separate policy to have coverage for hurricanes and flooding.
With the start of hurricane season swiftly approaching in June, you may find it important to start reviewing your policy now. And while June 1 is the official start of the season, hurricanes have been forming earlier over time due to climate changes so much that the National Weather Service considered moving hurricane season to begin on March 15. Ultimately, they did not; however, the NWS will now issue routine Tropical Weather Outlooks (TWOs) beginning May 15.
Here are seven things to know about how homeowners insurance works for storm-related coverage.
How much hurricane coverage do you need?
Generally, the limit for personal property is a percentage of the insured amount of the dwelling, says Britta Moss, a claim consultant with Highbanks Insurance Professionals in Delaware, Ohio. Many insurers provide personal property coverage of 50% to 70% of your home’s insured value, according to the Insurance Information Institute (III). If you need more (or less) coverage, you can tweak your policy by talking with your insurance agent, says Moss.
A standard homeowners policy provides protection for: 1) your dwelling (the structure of the home); 2) detached units (like a shed or detached garage); 3) personal property (your belongings) and 4) living expenses if you are displaced.
Dwelling coverage covers the structure of your home, your roof and built-in appliances such as your water heater or kitchen cabinets. You generally buy this coverage equal to the total rebuild cost of your home.
Hurricane damage is expensive and likely more than might initially anticipate. If you want to be extra careful, you could ask about extended dwelling coverage for higher limits.
Detached units coverage
Homeowners often overlook this area when updating or obtaining insurance. Detached structures can include garages, sheds, barns, gazebos and more. According to III, this coverage is usually based on a percentage of your dwelling. For example, if you have $400,000 in dwelling coverage, you may have up to $40,000 in coverage for detached units.
Personal property coverage is essentially what it sounds like. It covers property that is not physically attached to your house, which could include clothing, furniture, appliances and more.
The property damage may be significant from a hurricane due to winds, but you may also need coverage for the contents in your home. Hurricane winds can damage more than the home’s structure. To protect your home’s contents, you may insure your belongings at their replacement cost instead of their actual cash value so you can replace them with new items of equivalent value.
Understanding your coverage for living expenses is important because you could be displaced for a long time after a major storm. This coverage helps pay for additional living expenses that are a result of displacement following a loss. This could include hotel and food expenses while your home is being repaired.
How do hurricane deductibles work for homeowners insurance?
If your homeowners insurance does cover for wind damage or other hurricane damage, then claims may be subject to a separate deductible. These deductibles are typically higher than standard homeowners insurance and set as a percentage – usually 1% to 5% at least – of your dwelling coverage. For example, if you are covered for $400,000 and your hurricane deductible is 5%, then you may have to cover a $20,000 deductible.
Do you need a hurricane deductible?
Almost every state on the Atlantic coast allows special hurricane deductibles to be charged by insurers. It is possible that you may have the option to pay a higher premium to lower your fixed deductible.
Hurricane deductibles are usually triggered by an official hurricane ruling from the National Weather Service, but can vary slightly by state and insurance company. While hurricane deductibles may be steep, leaving the coverage off your policy completely could cost you more in the long run if you are in a high-risk area for hurricanes.
What states have hurricane deductibles
Nineteen states and Washington, D.C., have hurricane deductibles:
- District of Columbia
- New Jersey
- New York
- North Carolina
- Rhode Island
- South Carolina
Additional hurricane coverages to consider
Some homeowners may be surprised to learn that flooding — even from a hurricane — is generally not covered by a standard homeowners insurance policy. If you live in a federal flood zone and you have a mortgage, you will likely have to purchase flood insurance through the National Flood Insurance Program, or NFIP, when you buy your home.
The federal program provides up to $250,000 in dwelling coverage and $100,000 in personal property coverage, according to the Federal Emergency Management Agency, or FEMA, which administers the NFIP. If the value of your home exceeds the NFIP limit, your lender may require you to purchase additional flood coverage from a private insurer — even if the federal government doesn’t require it in a lower-risk area.
More than 20% of flood claims come from properties outside high-risk federal flood zones, according to FEMA. Because of this, it may be better to err on the side of caution and buy flood insurance if your area is at all subject to flooding. Otherwise, you could be stuck with the entire bill if your home is damaged by water, says Sara Singhas, director at the Mortgage Bankers Association.
Water backup coverage
Sewage overflow is not something you want to think of after a hurricane, but it could happen as a result of flooding. Water backup coverage helps protect your home and personal property from water damage if sewage water backs up into your home through your plumbing or sump pump.
Debris removal coverage
Homeowners insurance generally covers debris removal if, for instance, a tree falls on your property. However, the coverage usually only goes up to a certain amount. Debris removal following a hurricane can easily exceed that cap so you may want to check if your insurer offers a coverage endorsement to increase your debris removal reimbursement.
Regular documentation can help streamline the claims process
There are things you can do to help streamline the claims process, but also alleviate some stress during a crisis. Take photos and videos of the interior and exterior of your home routinely (every six months to a year) to document what your home looks like and what is in it. If you have done major renovations or repairs, make an inventory of that, too, and upload all of the documentation to the cloud so you can access it remotely, Moss says.
After a storm, it could take time for an insurance adjuster to inspect your home so document everything again as soon as you can. Moss advises having your own documentation can help your insurer process your claim more quickly and resolve potential claim disputes.
Renters and condo owners typically need special coverage
Renters insurance policies are just as important as homeowners policies are, but for two different circumstances. If you live in an apartment, your landlord insures the building, but you need to carry insurance for your possessions, also known as renters insurance.
If you own a condo, find out what areas are covered by the association and what you will need to insure. In addition to your personal items, it is possible that you may be responsible to help pay for a portion of the repairs to the damaged structure. Check with your association attorney or property management company before you buy and find out exactly what type of coverage you will need.
Fortunately, there is typically no hurricane deductible for renters insurance policies – only the standard deductible.
Frequently asked questions
Is there such a thing as hurricane insurance?
There is no such thing as “hurricane insurance” or “hurricane coverage,” but there is insurance to cover damage associated with hurricanes. Wind damage and flooding are the two major dangers.
Some home insurers in coastal regions exclude windstorm damage, so windstorm insurance will need to be purchased separately. Flooding is also a big concern. Home insurers generally do not cover flood damage, so a separate flood insurance policy will be needed.
What is a hurricane moratorium?
An insurance moratorium is a period of time where new policies cannot be written and updates to existing policies cannot be made. In regards to hurricanes, a moratorium is usually put into effect once a hurricane watch or warning has been issued by the NOAA.
What happens if your car is damaged in a hurricane?
Hurricane damage (like flood and wind damage) to your car is generally covered as long as you carry comprehensive insurance on your auto policy.
How much is hurricane insurance?
The cost of hurricane insurance depends greatly on the underlying policies. Flood insurance from the NFIP costs around $700 per year on average. Your own rates will depend on where you live, the amount of coverage you need, and the deductibles you choose.
If you are looking to buy a home soon, shop around with multiple insurance companies to compare pricing and coverage. Finally, it could be beneficial to do more than a skim-read of your policy. Take the time to understand what it includes (and what it does not), how to file a claim and any additional coverage you might need to purchase.