Homeowners Insurance Guide for Hurricane Season
With hurricane season quickly approaching it’s important to review your homeowners policy. Hurricane season starts on June 1st and ends on November 30th. This homeowners insurance guide will help prepare you for hurricane season and make sure that you and your family are protected in case you are negatively affected by a hurricane. If you haven’t already located a copy of your current homeowners policy. If you do not have one, you can request one from your insurance company or agent either online or by calling.
A standard homeowners policy covers your house for unexpected disasters such as hurricanes, windstorms and many other types of situations that may occur that can cause damage to your house. A standard policy will cover the dwelling itself, other structures such as fences, sheds, etc., contents which are your personal property and loss of use or additional living expenses. Typically, a homeowners policy will also have two separate deductibles, one for hurricanes and one for all other perils.
Coverages
Typical homeowners policies have a few different coverages, they may also include some sub-coverages. These include dwelling, other structures, contents, loss of use and sub-coverages.
Dwelling – The main coverage your policy will typically account for is the dwelling, which is coverage that covers the house itself. This includes the roof, walls/ceiling, flooring, fixtures, electrical, etc. Basically, anything that’s affixed to the house and can’t easily be removed or is not portable. Your dwelling coverage will likely be the largest amount. It is important to check this coverage and make sure that you have enough. If in the event a hurricane were to completely destroy your home, this would be the main coverage used to rebuild the house. Make sure that the amount is large enough to pay for a complete rebuild if needed.
Other Structures – The other main type of coverage a homeowners policy has is other structures. This coverage accounts for things like fencing, sheds, detached garages, etc. As the name implies it covers structures other than the dwelling. This coverage may be expressed as a percentage of your dwelling coverage. Many people overlook this coverage and don’t have an adequate amount to cover their other structures. This may help save some money on the premium, but if a hurricane comes through and destroys the fence surrounding your backyard, this coverage may not pay enough to replace that fence.
Contents/Personal Property – Contents or personal property is the next main coverage your policy will likely have. This coverage will pay to replace or restore any personal property that may have been damaged during the hurricane. The amount of this coverage is usually half of the amount of your dwelling. For most people, this tends to be an adequate amount to cover damaged items, as contents are not often damaged if the extent of the loss is some roof damage and an interior ceiling leak or two. However, if there is a total loss the amount of this coverage can be used up quickly. In preparation for a hurricane its always a smart thing to document your belongings either with photos or a video. You can see more about what to do to prepare for hurricane season here.
Loss of Use/Additional Living Expenses – The last primary coverage your policy will likely include is loss of use. Sometimes this coverage is referred to as additional living expenses (ALE). This will cover you if you cannot live in your house for a period due to the overall extent of damages or during repairs. This also covers you for any expenses that may be above and beyond your normal expenses because the loss disrupted your normal living habits. Sometimes policies will limit the amount of time you can collect on this coverage. Double-check your policy to see if these time limits apply. This coverage also includes loss of rent. So, if you are renting out a room, that lost rent can be repaid under this coverage.
Other Sub-Coverages – Many policies will have sub-coverages that may or may not go above and beyond the policy’s main coverages. One of the most common is ordinance and law. This coverage is usually expressed as a percentage of your dwelling coverage. It provides coverage for things like code upgrades. For example, if you have single-pane windows and current code requires you to have impact-resistant windows, your O&L will cover that upgrade. Other sub-coverages may include debris removal and mold/fungi/rot. Make sure you understand these coverages as they may limit how much you can recover for your claim. If you need help understanding these sub-coverages, please contact a claims professional to assist.
Deductibles
The deductible is the portion of the claim that you are responsible for. Most policies have a couple of deductibles, a hurricane deductible, and a deductible for all other perils. Typically, a deductible for hurricanes is represented as a percentage of the dwelling coverage, typically 2%, but can be as much as 5%. For example, if you have $300,000 worth of coverage for your dwelling and your hurricane deductible is 2%, the deductible you would incur for a hurricane claim is $6,000. Some carriers offer other options for hurricane deductibles, such as a flat $500 or $1,000, however, this is usually offered at a higher premium. Again, changing this deductible can affect your premium payments. Be aware of what your hurricane deductible is, so you are not caught unaware.
Understanding what your policy covers
This may seem like an obvious statement; however many policies will contain exclusions or limits of liability. This means that the policy may specifically exclude covering damages that were caused in a specific way. For example, an insurance company may deny or not pay on a claim with water damage on the ceilings because they deem that there was no wind created opening. This will occur if a policy has a wind-created opening provision. It’s important to read through the policy and understand what is covered and what isn’t. If you need help understanding the language of your policy, please contact a claims professional to help.
Many homeowners policies typically don’t cover groundwater for hurricane claims. This means if there is water seepage from the ground into your home, the policy will likely not cover it. This type of groundwater exclusion also would apply to storm surges. As many of us in Florida know, storm surge can cause much of the damage with a hurricane. However, if a storm surge hits and floods your house, this would typically not be covered under your standard homeowners policy. If you have a concern about the possibility of storm surge or flooding, you can obtain separate flood insurance here.
Insurance policies are contracts between you and the insurance company that is designed to cover you in the event you have a loss. These policies can be dozens of pages long and they don’t read like your favorite novel. If you are having difficulty understanding exactly what your policy says and what it covers, please contact a claims professional to help.
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