A Guide to Hurricane, Windstorm and Flood Insurance

Homeowner’s Insurance May Exclude Hurricane, Windstorm and Flood Damage

It isn’t enough to assume that a homeowner’s insurance policy gives automatic coverage against hurricane, windstorm and flood damage. Most regular policies, for example, will exclude flood and storm surge damage completely and this may need to be purchased separately through the National Flood Insurance Program. Some policies may also exclude hurricane and wind damage.

Any coverage that is given for hurricane and wind damage also needs to be checked to make sure that properties and home contents are protected. Those with an older policy that have remodelled or added to their homes may need to make sure that they have enough coverage to meet any increased value. Keep in mind that it is not the value of the property that matters here but the rebuild cost.

Hurricane and Windstorm Deductibles May Cost More

Regular homeowner’s insurance policies come with deductibles. This is the money that the homeowner has to pay for a claim before the insurance company takes over. Regular deductibles are usually based on dollar amounts (i.e. $500) but hurricane and wind damage deductibles are now generally based on percentages.

According to the Insurance Information Institute this can range from 1-5% of the insured value of the property but may be increased in high-risk areas. Those at risk of hurricance or windstorm damage may find it useful to save to meet this cost in the event that they have to claim. Some insurance companies will still allow dollar deductibles but taking this option may incur higher premium costs.

Wind Mitigation Certificates Could Give Cheaper Insurance Costs

Homeowners that have taken steps to protect their properties against wind damage or those that are willing to do so may find it useful to get wind mitigation certification. Having a formal inspection of a home and an assessment of measures taken to minimize wind damage could lead to discounts on insurance costs. Some companies may also add a surcharge to premiums if no certificate is available.

Additional Living Expenses (ALE) Coverage May be Useful

People that suffer from wind or flood damage may have to vacate their homes while it is fixed. If they have Additional Living Expenses (ALE) coverage in place then their expenses may be met. If they don’t, then they will have to meet costs out of their own pockets. This benefit is not automatically included in every policy and, if not, it may be worth buying separately.

Keep in mind that hurricane, windstorm and flood insurance needs to purchased in advance of potential problems. Some policies will also have a waiting period before coverage will start..

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