Does homeowners insurance cover hurricane damage?
According to the NOAA, 2020 was a record-breaking year for natural disasters. The annual, 21-name list of hurricanes was exhausted by September and for the second time in history, the remainder of hurricanes were named using the Greek alphabet. 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 generally covers the repair costs from damage caused by most natural disasters, but not all. The flooding caused by a hurricane and storm surges that occur are typically excluded 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 in June, you may find it important to start reviewing your policy. And while June 1 is the official start of the season, hurricanes have been forming earlier over time due to climate changes. The National Weather Service previously considered moving hurricane season to begin on March 15, but ultimately decided against it. However, the NWS will now issue routine Tropical Weather Outlooks (TWOs) beginning May 15.
- A standard home insurance policy does not cover all aspects of hurricane damage.
- Flood insurance covers hurricane-related storm surges and flood damage.
- You may have a separate, and higher, hurricane insurance deductible.
- Getting hurricane coverage before the season starts may be the best idea to ensure you have coverage. Typically, there are moratoriums (restrictions) for buying or adjusting coverage when a hurricane is imminent.
How much hurricane coverage do you need?
Depending on your circumstances or preferred degree of financial protection, you may need to consider higher coverage limits or coverage add-ons to your policy, above what a standard HO-3 policy provides. Most homeowners policies provide financial protection for:
- Your dwelling (the structure of the home)
- Detached units (like a shed or detached garage)
- Personal property (your belongings)
- 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 be anticipated. If you want to be extra careful, you could ask about extended dwelling coverage for higher limits.
Other structures coverage
Detached structures include garages, sheds, barns, gazebos and more. This coverage is based on a percentage, generally 10%, of your dwelling coverage. 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
Personal property coverage is essentially what it sounds like. It covers property that is not physically attached to your house, which includes clothing, furniture, appliances and more.
Generally, the limit for personal property is a percentage of the insured amount of the dwelling. Many insurers provide personal property coverage of 50% to 70% of your home’s insured value, according to the Insurance Information Institute (III).
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 help replace 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.
Additional living expenses
Understanding your coverage for living expenses is important because you could be displaced 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% – 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 insurance companies to require a separate hurricane deductible. 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 costly, the coverage is essential protection for those in high-risk areas 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
What is 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 insurance companies will not write new policies or allow coverage updates to existing policies. 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 flood insurance depends on your policy limits and the degree of financial protection you require, as well as if you purchase from a government flood insurance provider or a private company. Flood insurance from the National Flood Insurance Program costs around $700 per year on average. Your own rates will depend on where you live, if you are in a flood zone, 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.