It is crucial to understand what to do with your insurance before, during, and after a hurricane to best protect yourself and your assets.
Most of us know how to prepare our homes and families for a hurricane: board up windows, gather supplies, and fill up gas tanks, for example. But do you know what to do about your insurance when a hurricane hits?
With hurricane season upon us, it is more important than ever to understand how insurance and hurricanes relate to one another. Taking necessary precautions and knowing what to do about your insurance needs before, during, and after a hurricane are crucial steps towards best protecting yourself and your assets. Here are four important things to understand about insurance and hurricanes.
1. Hurricane Deductibles
Most homeowners insurance policies include provisions that relate to damage caused by hurricanes; often, there are higher deductibles for losses caused by hurricanes. Many times these provisions state that, with hurricane damage, homeowners are responsible for paying a percentage of the limit of insurance on the home, typically between 2-10%. This means that if your home’s value is $300,000, you might pay $6,000 of those costs with a 2% hurricane deductible; your homeowners policy would pay the rest of the loss.
You can generally expect the percentage you pay to be higher if you live in coastal areas which are more prone to wind damage. As stated by the Insurance Information Institute:
“By Florida statute, the application of hurricane deductibles is triggered by windstorm losses resulting only from a hurricane declared by [the] National Weather Service. Hurricane deductibles apply for damage that occurs from the time a hurricane watch or warning is issued for any part of Florida, up to 72 hours after such a watch or warning ends, and anytime hurricane conditions exist throughout the state.”
Check with your insurance provider if you are unsure whether damage to your home qualifies as hurricane damage.
2. Wind-Driven Rain and Flood Damage
During a hurricane, damage caused by wind-driven rain (for example, rain blown through poorly sealed doors and windows) or flooding is not typically covered by insurance. While wind damage is often covered as subject to the hurricane deductible, water damage generally is not.
To protect from rain damage during a hurricane, you will likely need a separate flood insurance policy. It is important to note that flood insurance policies often exclude water damage to basements and their contents due to their nature of being prone to flooding.
3. Repair Scams
Unfortunately, some people try to take advantage of down-on-their-luck homeowners after a hurricane hits by offering “repair” services with contracts designed to strip homeowners of their insurance policy proceeds. You should resist signing paperwork that assigns the rights and benefits of your homeowners policy to someone else.
According to the Florida Association of Insurance Agents, “Assignment of benefits scams are a leading cause of rising insurance rates, and fraud artists see a hurricane aftermath as a golden opportunity to prey on unsuspecting homeowners.” You should always contact your insurance agent before signing paperwork with repair companies. They will direct you on the best way to proceed.
4. Mitigation and Documentation
As a homeowner, you are expected by your insurance company to document any damage to your home and to mitigate damage to your home to the extent that you safely can. For example, placing a tarp over a hole in your roof could help prevent further damage to your flooring.
To document damage to your home, you should take plenty of photos of the damage, ensuring that the photos are in focus and that the damage can be clearly seen. It is also a good idea to save receipts from out-of-pocket costs that arise as you mitigate the damage.
With these points in mind, you can best prepare for and deal with the aftermath of a hurricane as it relates to your homeowners insurance. Next time a hurricane threatens, remember these tips as you prepare before the storm and for what might happen after the storm.