Hurricane season generally starts May 15th in the Pacific basin and June 1st in the Atlantic, both lasting through November 30th.[1] That’s about half of the year that your home may be at risk of sustaining severe damage due to a hurricane. Have you considered options to guard against the financial destruction that a hurricane may bring?
To understand the importance of maintaining insurance that may respond in the event of a hurricane, you should know the scope of your home insurance coverage.
Why do I need insurance for hurricane season?
Without adequate insurance, your finances could end up “under water” in the event of a hurricane. Hurricanes can be extremely destructive. Just a little water damage can cost a lot of money, and if a hurricane significantly damages your home, the financial consequences could be even worse.
It's important to be prepared for potential damage caused by severe weather or natural disasters. One way to do this is by evaluating your insurance policy to see if it may provide sufficient coverage in the event of a loss. If you're unsure about your coverage, consider speaking with your insurance provider to discuss your coverage limits and additional coverage options.
Taking these steps can help protect your home and give you peace of mind during times of uncertainty. A combination of home insurance, flood insurance, and supplemental coverages can reduce the risk that you might have to pay entirely out of pocket if a hurricane damages or destroys your house and belongings.
Does my homeowners’ insurance policy cover damage due to hurricanes?
Your home insurance may cover damage caused hurricanes, but homeowners’ insurance policies generally do not cover damage due to flooding or electrical surges. That’s why it’s important to understand the scope of your homeowners’ insurance policy, so you can consider filling any gaps with supplemental coverages, such as a wind damage endorsement or flood policy to the extent they are available.
What may a homeowners’ policy cover in the event of a hurricane?
Damage due to hurricanes and windstorms may be covered under a homeowners’ insurance policy. If you have a named peril policy, ensure that hurricanes are listed as a peril on your policy so that you may be able to obtain coverage for hurricane damage. If you have an open peril or all perils policy, verify if damage due to hurricanes is excluded under your policy. If hurricane damage is excluded under your policy, you may want to consider shopping around for a homeowners’ insurance policy that might better respond to your coverage needs.
If your homeowners’ insurance policy may provide coverage for hurricane damage, then the policy will likely cover the cost to repair or rebuild the structure of your home (dwelling coverage) as well as the cost to repair or replace the damaged items in your house (contents coverage). It may also cover other structures and loss of use of your property.
What may a homeowners’ policy not cover in the event of a hurricane?
Most home insurance policies do not cover flooding, even if that flooding occurs due to a hurricane. If you are weathering a hurricane, chances are you will also experience flooding. Furthermore, if you live in a coastal area, your property is at a higher risk of sustaining flood damage due to its proximity to the water, so maintaining a flood insurance policy can be beneficial regardless of your risk of sustaining hurricane damage.
Home insurance policies may also exclude damage arising out of sewer backups and power surges. Both events may accompany hurricanes, so you may want to consider purchasing coverages that may respond to damages due to these events.
Your home insurance policy may also contain other exclusions, so chat with your Licensed Advisor at InsuraMatch to understand what may or may not be covered under your homeowners’ policy.
What is a hurricane deductible?
Some home insurance policies, particularly those that cover homes located in coastal areas, may have a separate deductible that is applicable to damages caused by hurricanes. This means that you would have a separate deductible that is not the same as your standard deductible, and you would pay the “hurricane” deductible in the event of a hurricane-related claim.
Most hurricane deductibles are expressed as a percentage of your dwelling coverage and may range anywhere from 1-5%. Those homes that are at a higher risk for sustaining damage due to a hurricane may have a higher deductible. [2]
What coverages should I review in my homeowners’ policy to determine if I may have the appropriate coverage in the event of a hurricane?
You’ll want to look at three aspects of your home insurance: dwelling coverage, property coverage, and additional living expenses.
- Make sure the limits of your dwelling coverage are high enough to cover the cost to repair or replace the entire structure of your house. If you have any additional structures on your property, like a pool or detached garage, you’ll want to verify that the limits of your additional structures’ coverage are sufficient to cover the value of all the structures on your property.
- Compile an inventory of all your possessions. Your property coverage limits should cover the replacement cost or cash value of all your items. Most homeowners’ policies offer 50-70% of the dwelling coverage as the standard property coverage limits.[3] If this is not enough to cover your belongings, you may want to consider increasing your limits. If you have any high-value items like fine art, collectibles, or cash, you may want to consider a special rider that may provide coverage for these items if they are damaged or stolen.
- Additional Living Expenses (ALE), or Loss of Use coverage, provides coverage for costs incurred if you need to live elsewhere if your home becomes temporarily uninhabitable due to a hurricane or other disaster. This coverage may be beneficial in the event that your home is destroyed in a hurricane, so that you may not have to worry about paying for a place to stay while your property is being repaired or rebuilt. Your ALE limit is often between 20%-30% of your dwelling coverage limit[4], but you may have the option to purchase a higher limit.
Talk to our Licensed Advisors to learn more about options for homeowner insurance policies and flood insurance policies that can help to give you peace of mind during hurricane season.