Haris Ashley
Hurricanes are becoming increasingly common due to climate change, and they are wreaking havoc on homes and property. As a result, insurance companies are facing more damage claims, and the costs of rebuilding have increased due to inflation. This has led to a rise in insurance premiums and a decrease in coverage. Homeowners in hurricane-prone areas, such as Florida, are bearing the brunt of these changes, with some struggling to find insurance companies that will cover them. As the frequency and severity of hurricanes continue to increase, the insurance industry may need to adapt to remain stable.
| Characteristics | Values |
|---|---|
| Hurricane insurance coverage | Combination of flood, home, and wind insurance |
| Who should get hurricane insurance? | Homeowners, condo owners, landlords, and renters |
| Car insurance and hurricane damage | Comprehensive coverage covers hurricane damage to the car |
| Home insurance and hurricane damage | Standard homeowners insurance covers hurricane damage, but flood insurance is separate |
| Hurricane deductible | Percentage of the insured value of the home, typically 1-5%, higher in high-risk areas |
| Hurricane moratorium | Period after a hurricane forecast when no new policies are written or updates allowed |
| Additional living expenses (ALE) | Covers extra costs if you can't live in your home due to hurricane damage |
| Condo insurance | Does not cover special assessments from hurricanes |
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What You'll Learn
Home insurance and hurricane damage
Home insurance policies typically cover damage from strong winds, including hurricanes. However, your policy may have a separate deductible for hurricane damage, and a standard home insurance policy does not cover all aspects of hurricane damage. Flood insurance, for example, is usually a separate policy that covers hurricane-related storm surges and flood damage, but not mold damage.
If you live in a hurricane-prone state, it's essential to have the proper insurance coverage in place. Many homeowners fail to adequately protect their property and belongings against hurricanes, and the cost of repairs can be high. Even if you have insurance, you may still have to pay thousands of dollars in deductibles.
In the US, 19 states and Washington, D.C., allow insurers to charge special deductibles for hurricane damage. These deductibles are typically a percentage of your home's dwelling coverage limit, ranging from 1% to 5%, but they can be higher in high-risk coastal areas. If your dwelling coverage is $200,000 and you have a 2% deductible, your insurer will pay you $6,000 for a $10,000 claim, leaving you responsible for the remaining $4,000.
Condo owners may face additional challenges with hurricane insurance. While their personal belongings and most things inside their condo are covered, they may be issued a special assessment to contribute to building repairs if the building sustains substantial damage. Condo insurance does not cover these special assessments, so condo owners should consider purchasing loss assessment coverage.
It's important to review your homeowners insurance policy carefully to understand what is and isn't covered in the event of a hurricane. Check with your insurance agent to confirm the deductibles that apply to your policy and under what circumstances they are triggered. It's also a good idea to get hurricane coverage before the season starts to ensure you're protected.
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Car insurance and hurricane damage
If you live in a hurricane-prone state, it is important to understand how your car insurance policy works in the event of hurricane damage. While standard home insurance policies do not cover all aspects of hurricane damage, car insurance policies with comprehensive coverage, also called "other than collision" coverage, typically cover hurricane damage. This includes damage from strong winds, flooding, and water damage. However, it is important to note that comprehensive coverage is not automatically included in car insurance policies and needs to be specifically requested and added to your policy.
Comprehensive coverage protects your vehicle against common causes of damage during hurricanes, such as strong winds, flying debris, and water damage. It is important to review your policy or contact your insurance agent to confirm whether hurricane damage is covered. Additionally, comprehensive coverage usually carries a deductible, which is the amount of money you are responsible for when filing a claim. These deductibles can be quite high, ranging from $500 to $1,500, and are typically subtracted from your claim payout.
In some cases, collision coverage may also be relevant if you are evacuating and get into an accident due to hurricane conditions. Collision coverage helps pay for repairs to your vehicle when you are at fault in an accident. It is worth noting that if you have a loan or lease on your vehicle, your financial lender may require you to carry full coverage insurance, which includes both comprehensive and collision coverages.
It is recommended to prepare your vehicle ahead of a hurricane by storing it in a covered area, filling up your gas tank, and stocking your car with an emergency kit. Additionally, having a copy of your policy documentation, including policy numbers and contact information for your insurance company, can be useful if you need to file a claim.
Furthermore, it is important to be aware that filing a claim for hurricane-related damage may result in an increase in your car insurance rates. Even if you don't file a claim, living in a high-risk state for hurricanes may lead to higher premiums for both car and home insurance due to the increased likelihood of storm-related claims. Demonstrating that you have a safe place to park your vehicle during hurricanes may help reduce your premium in hurricane-prone regions.
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Hurricane deductibles
A standard home insurance policy does not cover all aspects of hurricane damage. Flood insurance, for example, is often separate from home insurance and covers hurricane-related storm surges and flood damage. Mold damage, however, is typically not included in flood insurance.
Homeowners in 19 states and Washington, D.C., must pay hurricane deductibles instead of their regular deductibles when making a hurricane damage claim. These states include 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.
The hurricane deductible must be listed as a dollar amount, even if it is also listed as a percentage. In Florida, insurance companies must offer hurricane deductible options of $500, 2%, 5%, or 10% of the policy dwelling or structure limits, unless the specific percentage deductible is less than $500.
It is important to note that even if you are fully insured, you may still end up paying thousands of dollars for repairs because wind and hurricane deductibles can be quite high. Comprehensive insurance, for example, typically carries a deductible of $500-$1,500, which would be subtracted from your claim payout.
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Condo insurance and hurricane damage
When it comes to hurricane damage, condo owners may face challenges due to the shared nature of their living situation. While their personal belongings and most items inside their condo unit are typically covered by their condo insurance, there are grey areas. For instance, if the building sustains significant damage, condo owners may be issued a special assessment to contribute to the repairs, which is generally not covered by their insurance. To prepare for such scenarios, condo owners are advised to purchase loss assessment coverage, which helps pay for special assessments.
Additionally, standard condo insurance policies do not cover flood damage, including damage from storm surges. Flood coverage must be purchased separately, either through the federally backed National Flood Insurance Program (NFIP) or a private flood insurance provider. This is an important consideration since hurricanes often bring heavy rains and flooding. Condo owners should also be aware of hurricane deductibles, which can be higher in high-risk coastal areas. These deductibles are typically a percentage of the home's dwelling coverage limit and can result in substantial out-of-pocket expenses.
Given the complexities of condo insurance and hurricane damage, it is recommended that condo owners review their policies carefully and consult with insurance professionals or lawyers specializing in hurricane insurance claims to ensure they have adequate coverage. Preparing in advance of hurricane season is crucial, as insurance companies may impose a moratorium on new policies or updates to existing policies once a hurricane watch or warning is issued.
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Preparing your vehicle for a hurricane
Check and Service Your Vehicle
Before the hurricane season begins, it is essential to have a professional inspect your vehicle and perform scheduled maintenance. This will ensure your car is ready for any necessary evacuations, which may involve driving long distances or idling for extended periods. Check for any recalls for your vehicle and address critical concerns and safety issues as soon as possible.
Fuel and Battery
Ensure your gas tank is full before the hurricane hits. Be prepared for long lines at gas and charging stations if you need to evacuate, so refuelling early is important. Also, make sure your battery is charged.
Fluids, Wipers, and Tires
Check your car's oil, wipers, and tires. Ensure that your wiper fluid is topped up and that your wipers are in good condition. Check the tire pressure and tread depth, and ensure your tires are properly inflated and in good condition.
Parking and Storage
If you have a garage, park your car inside and fully close the garage door. Cover your car with a padded car cover for added protection. If your garage has exterior windows or secondary doors, board them up, just as you would for the windows of your home. If you don't have a garage, consider parking your car in a covered and secure location, if possible.
Sunroofs and Windows
Don't forget to close the sunroof and all windows of your car. Even if your car is parked in a garage, it is advisable to close all windows and the sunroof to avoid any potential damage from flying debris or water ingress.
Documentation and Insurance
Gather all ownership, registration, and insurance papers and put them in a waterproof container, along with other essential items like water, food, extra clothing, flashlights, physical maps, and car chargers. Keep this go-bag readily accessible in your vehicle.
Photography
Take photos of your vehicle, both inside and out, before the storm hits. This will help with insurance claims and provide a record of your vehicle's condition.
Evacuation Planning
If you need to evacuate, choose the most reliable vehicle for the journey. If you have multiple cars, leave one stored at home and use the most dependable one for your evacuation. Plan your route and stops in advance, and be prepared to adjust your plans if necessary. Conserve fuel and use your vehicle's resources efficiently during your evacuation journey.
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Frequently asked questions
Hurricane insurance is a combination of flood, home, and wind insurance.
Hurricane insurance covers hurricane-related storm surges, flood damage, and damage to the structure of your home. It may also cover damage to your vehicle, depending on your policy.
The cost of hurricane insurance depends on where you live and how much coverage you need. Wind and hurricane deductibles can be quite high, so you may end up paying thousands of dollars for repairs even if you are fully insured.
You can get hurricane insurance from government-backed policies or private insurers. Government-backed policies tend to have higher premiums, but they can be a lifesaving option for those who cannot secure coverage elsewhere.
Hurricane season takes place from June 1 to November 30 every year. It is important to review your insurance policy before hurricane season to ensure that you have adequate coverage.
