Insurance for Hurricane Preparedness
When hurricane season approaches, it’s not a question of whether there will be damage to your home, but rather a question of what kind and how much. A vital part of ensuring you are prepared for hurricane season is knowing exactly what your homeowners insurance policy will cover as a result of damage from a hurricane. Some policies exclude certain types of damage, possibly including flood damage. That’s why it’s essential to know you have the insurance coverage you need for your home before you’re dealing with the stress of making a claim and planning repairs.
Types of Hurricane Damage
Depending on its strength, hurricane damage can be anything from inconvenient to catastrophic. Some examples of hurricane damage are:
- Black mold requiring drywall replacement
- Roof leakage requiring roof replacement
- Wind damage
- Loss of trees and other plants and shrubbery
- Broken windows
- Uprooting exterior enclosures such as sheds, porches, pool screens, etc.
- Damaged concrete
- Damaged or destroyed fences
- Damage to cars and boats
- Damage to pool and pool equipment
- Damaged solar panels
- Solar panels damaged
- Storm debris
- Damage to personal property
- Personal liability
- Personal injury
- In the worst cases, complete loss of home
What Should Your Insurance Cover?
Ideally, your homeowners insurance policy should be based not on your home’s market value but instead on the total cost of completely rebuilding it should the worst happen. You should also have coverage for any living expenses if your home is rendered unlivable, replacing any personal property that is lost or destroyed, as well as personal liability because some insurance policies exclude certain types of natural disasters such as floods, you will also need to make sure that this is covered.
If FEMA has declared a state of emergency, some coverage may be available from FEMA. The Individuals and Households Program provides funding for rent (in cases where homes are unlivable) as well as some home repairs. FEMA also works with the National Flood Insurance Program (a subsidiary of FEMA) and the Small Business Administration for additional funding and some low-interest loans to homeowners and businesses. FEMA funds are targeted towards the hardest hit and lowest income areas, however. If your home is not in one of these areas, federal funding may not be available.
Neighborhood Association Insurance
Some areas of your property, such as the driveway, the sidewalk, and the curb strip of your lawn, may be considered common areas. If this is the case, the insurance policy of your Homeowners’ Association may cover repair. Some trees and plants in those areas may also be considered communal. You should determine with your neighborhood HOA what is considered your responsibility and what will be theirs.
Learning the Insurance Language
One reason many people are under-informed about the contents of their insurance policies is that they are often complex and written in legalese. To help you understand terms you may see in your policy, Houselogic has compiled a glossary of terminology. Important words to know pertaining to hurricane preparedness are:
- Act of God: a natural disaster not caused by humans, such as hurricanes, tornadoes, and earthquakes
- All Risks Coverage: a policy that covers anything not specifically excluded (this type of policy is usually more expensive)
- Contents Coverage: the coverage for your possessions and property (an inventory of your belongings can make filing a claim easier)
- Declarations Page: the summary page of your policy (usually the first page) that includes what is covered by your policy
- Dwelling Coverage: the coverage for damage your home
- Exclusions: anything not covered by your insurance policy (common exclusions are risks for your area – for example, floods in a hurricane-prone region)
- Flood Insurance: supplemental insurance that covers floods (most homeowners insurance policies do not cover flood damage)
- Insurance to Value: the value of your home compared to the actual dollar amount covered by your policy (an 80% minimum is often required by insurance companies)
- Loss of Use Coverage: the coverage for living expenses incurred if your home is unlivable
- Personal Liability Protection Coverage: the coverage for if you’re considered responsible for injuring someone else or damaging someone else’s property
- Replacement Value: the cost of completely replacing your home
Deciphering Your Homeowners Insurance Policy
It’s important to understand exactly what your homeowners insurance policy covers before any damage occurs. Many people do not know exactly what their policy covers ahead of time and only know that something isn’t covered when the claim is denied. By then it is too late to change policies or add supplementary insurance coverage.
Types of Policies
There are eight basic types of homeowners insurance policies. The most common policy type for homeowners is HO-3 because it offers a wider range of coverage and will cover any type of damage or peril that isn’t specifically excluded. Floods are commonly included in the list of exclusions for this type of policy.
- HO-1: This is the most basic policy and covers only 10 specifically listed perils. This type of policy has been discontinued in many states.
- HO-2: This policy type covers 16 specifically listed perils, but nothing outside of that list.
- HO-3: This type of policy covers anything that isn’t specifically excluded. If this is your policy type, make sure to check the list of exclusions for your policy.
- HO-4: This is renters’ insurance and is similar to HO-2 in that is covers only specific perils, but it does often cover living expenses if the apartment is temporarily unlivable.
- HO-5: This is a more comprehensive version of HO-3 and covers anything not specifically excluded. It has fewer exclusions than HO-3.
- HO-6: This is a policy for condos.
- HO-7: This is a policy for mobile homes.
- HO-8: This policy is for older homes, historic homes, and national landmarks. It’s similar to an HO-3, but is tailored to the specific needs of an older home.
Types of Coverage
There are two major sections of any homeowners insurance policy: property and liability. Within these two sections, coverage is divided into categories.
- Coverage A: This is the coverage for your home and any structures attached to it, such as a garage.
- Coverage B: This covers any additional structures on your property, including sheds, pools, and detached garages.
- Coverage C: This is the personal property coverage, which includes all of your belongings and isn’t limited to only property currently within your home.
- Coverage D: This is the coverage for loss of use of your home, including living expenses such as rent.
Coverage E: This coverage is for personal liability, such as if you are found responsible for injury to someone else or damage to someone else’s property.
- Coverage F: This is coverage for medical payments for others when you aren’t necessarily at fault but the other person isn’t covered by insurance.
Reading Your Policy
The first step to understanding your homeowners insurance policy is to read the declarations page. This page will provide a summary of your policy as well as any limits and premiums you may have. The next section to read is the Insurance Agreement, which will provide more details about your policy. The third section, the Conditions of the Policy, will provide information on your responsibilities.
Hurricane Preparedness and Homeowners Insurance
Once you understand your current homeowners insurance policy, the next step is to ensure that the policy will meet your needs in the event of a hurricane. Ask yourself the following questions: Do you need separate flood insurance? Will your policy cover the full value of home replacement? Will the full value of replacing your personal property be covered?
Updating Your Policy
Keeping your homeowners insurance policy up-to-date is as important as knowing what is covered. If you have made renovations or any other significant changes to your home, the cost of a complete replacement will be higher. The same applies if home values in your neighborhood have changed or contracts costs increased. If you have made any large purchases that would fall under personal property, make sure you aren’t underinsured for the cost of replacement.
When you file a claim with your insurance company, there will be some out-of-pocket expenses, such as the deductible and any living expenses that are not covered by your policy. It is important to ensure that your deductible is something that is affordable for you. Keep in mind that a hurricane may damage your home to the point that it is unlivable, making “loss-of-use coverage”, or insurance for living expenses such as rent, should also be included in your policy.
Personal Liability Insurance
Personal liability insurance is also a must for hurricane preparedness. Some damage to neighboring houses could be claimed on your insurance and personal liability insurance is what would cover this damage. For example, if a tree from your yard fell onto your neighbor’s roof, this could be claimed against your liability insurance.
Depending on where you live, some damage caused by a hurricane may not be covered. Floods are commonly excluded from typical homeowners insurance policies. If floods are not covered, you may be able to add flood insurance as a supplemental insurance policy so that you will be fully covered.
Most standard homeowners insurance policies do not cover flood damage. Additional insurance may be purchased through the National Flood Insurance Program (NFIP), which is part of FEMA. Some homeowners policies do cover some water damage, but damage from a hurricane may not qualify, depending on its severity and where you live. Storm surges can cause flooding that can reach inland in Florida, so flood insurance could make the difference between insurance coverage for damage and having to pay out-of-pocket. In some areas, flood insurance may be required.
Florida Home Restoration
If your home has been damaged in a hurricane, the first step is to assess the damage so that you can make the most accurate possible claim. Photograph everything as proof of the damage before attempting to do any cleanup or make any repairs. Once you have fully assessed the damage to your home and document it, contact your insurance agent as soon as possible to file a claim.
Filing a Claim
You should be able to file a claim either over the phone or online or, depending on your insurance company, via a mobile app. Make sure that you have your policy number and description of the damage ready when you contact your agent to make initiating the claim easier. Once the claim has been made, make sure you write down your claim number so that your file can be accessed more quickly when you contact your insurance company later. It is important to file the claim as soon as possible in order to minimize the risk of having the claim denied.
Assessing Hurricane Damage
After your claim has been processed, your insurance company will send an insurance adjuster to your property to assess the extent of the damage and how much coverage or reimbursement you will receive from your insurance policy. Like FEMA, insurance companies may be trying to deal with the worst-hit areas first, so there may be a wait depending on the extent of the damage to your home. It is important to keep track of all spending, including receipts for hotels and any repairs that couldn’t wait.
Help with Hurricane Damage
For damage that is not covered by your homeowners insurance policy, many banks and other companies may provide low-interest loans as a form of disaster relief. Some of these may include no fees for late payments and other perks to assist in rebuilding. For example, the Small Business Association has a Disaster Loan Assistance program that homeowners can apply for.
After a hurricane, cleanup of the storm debris is a major undertaking. Some cities may provide some of the cleanup services, so it’s important to find out what you will be responsible for. For example, some locations will provide debris pickup, but you’re responsible for the cleanup of your own yard and placing the debris at the pickup location.
Home Restoration, Rebuilding, and Repair
There are many contractors in Florida that will provide restoration, rebuilding, and repair services in the aftermath of a hurricane. Look for local companies that have reputations for timely and quality service. Sometimes your insurance company will handle contracting out the repair work, so check whether or not you are responsible for handling this yourself. If you are responsible for it, keep track of all payments for your insurance claim.