The Limits of Hurricane Insurance
& What You Can Do About It

By Emily McCrary-Ruiz-Esparza

Many prepare for the dangers of hurricane season by locking down a hurricane or flood insurance policy, but how far do these go in protecting your property, and how do know if you’ve purchased enough coverage? Do you know if you’re covered for wind and flood damage? How familiar are you with the terms of your policy? In the aftermath of Hurricane Harvey, many homeowners were surprised to learn that they had deductibles on their insurance policies. And despite increased development, fewer people along the North and South Carolina coasts own flood insurance than did five years ago.

Ultimately, no one can know exactly how a hurricane will affect them or their property, but understanding the possibilities and your coverage is the best place to start. “Wind damage, wind-driven water damage, and flood damage are the three most common hurricane-related losses,” says Jenny Naughton, executive vice president and risk consulting officer at global insurance company Chubb. “But homeowners can’t anticipate ahead of time how a hurricane will impact them, so it’s important to understand the nuances of their insurance policy by discussing different policy coverages, whether their policy excludes wind, contains a significant wind damage deductible, and whether they have purchased flood coverage since homeowners policies don’t typically cover flood.”

CoreLogic estimates that nearly seven million people are at risk for hurricane damage in 2018. And despite experiencing one of the worst hurricane seasons on record—that is, 2017, in which the United States saw three of the five most costly hurricanes on record64% of homeowners have not changed their home protection strategies over the last 12 months

“Homeowners don’t want to think that the risks apply to them,” says Naughton. “It is human nature. It is always a good practice to review your policy and your home protection strategies annually with your agent or broker to [ensure] you are adequately protected.” But there is such a thing as too late: insurers and agents can typically help clients adjust coverages with no storm in sight, but not when a hurricane is bearing down.

Damage from severe weather is not just a coastal problem. Even if you’re not directly on the coast, you could still be at risk for hurricane damage. Naughton notes that after Hurricane Harvey, 33% of Chubb personal insurance claims were 25–50 miles away from the shore line, and in Hurricane Irma, 31% were 25–50 miles from the coast. “In addition, floods are the number-one disaster in the United States,” Naughton says. “So even if a homeowner is not near the water, protecting one’s home from unexpected flooding is important. What’s more, a homeowner’s policy generally isn’t designed to provide against flooding. Thus homeowners should consider a separate flood policy to help lessen the financial impact of a flood.”

Homeowners in hurricane-prone states like Florida, South Carolina, and North Carolina should also note that their homeowners policies may not cover hurricane-related wind damage. And even if you don’t live directly on the water or within a few miles, you could still sustain serious damage from falling trees and debris as a result of hurricane winds.

The right policy for you is highly dependent on your area and your home, so have a conversation with an insurance professional before you make a purchase. “Depending on where your home is located, your needs will vary,” says Naughton. “So the best option is to talk with an independent agent or broker to determine whether you need additional protection, which is most often addressed by private coverage.”

In the weeks and months following hurricane Harvey, news stories broke about the many homeowners who were shocked to find that they were still on the hook for hundreds or even thousands of dollars in the form of a deductible. Deductibles are pretty standard for most hurricane and flood insurance policies in the same way they’re standard for medical and auto insurance policies, but they do operate differently. “Hurricane deductibles are generally applied as a percentage of the insured value of the home when the damage is attributable to a hurricane,” Naughton explains,” unlike the standard ‘dollar deductible’ on your homeowners policy that you would pay toward an insured loss not associated with hurricanes.”

Homeowners in coastal states may find that their policies have separate deductibles of 2–15% of the insured value of the home for hurricanes and/or wind events, though these deductible amounts will vary from state to state.

Questions to ask when shopping for hurricane insurance

Though landing on the right policy will require a conversation with an insurance professional, you can come prepared for that conversation with these questions.

Naughton recommends homeowners in high-risk areas ask three questions when shopping for insurance:

  • Do I have protection for wind events?
  • Do I have a hurricane deductible?
  • Am I covered for flood?

For those looking for additional coverage, Naughton suggests these questions:

  • How does it align with your current homeowner’s policy? For instance, does it cover sewer and drain back up-related issues (i.e., your sump pump fails)? Most policies only offer this protection at small limits
  • Does it cover items in your basement?
  • Does it provide replacement coverage on contents?
  • Does it cover additional living expenses incurred as a result of the flood?

How to protect your home from hurricane damage

The most protected properties are prepared in advance. Beyond having the right insurance in place, there are actionable protection measures homeowners should take to help protect their property in advance of hurricane season:

  • Clear gutters and downspouts.
  • Prune trees and shrubbery.
  • Consider investing in storm shutters and a back-up generator (added bonus: depending on your state, you may be eligible to save on your premium).
  • Make sure sump pumps have been tested and are operating properly.

In the immediate lead-up to the storm:

  • Trim large trees and shrubs. Bring outside patio and lawn furniture, potted plants, and bicycles and toys indoors. Close and secure all awnings and tie down any loose items that may become projectiles in high wind.
  • Make sure windows, doors, and skylights are protected with appropriate shutters or impact-resistant glass. Plywood can be used as last-minute protection.
  • Regularly test your gas-powered generator and have plenty of fuel on hand to ensure that it’s ready when you need it. (Just make sure you also have a carbon monoxide detector too.)
  • Secure all interior wall hangings and be sure that art hung on exterior walls are taken off the wall and placed in an interior room, elevated at least three inches off the floor.
  • Keep a copy of your homeowner’s insurance policy with you, in a waterproof container.
  • Stay informed about weather conditions by monitoring NOAA Weather Radio or local television and radio stations for updates and evacuations.
  • Obey all evacuation orders and do not attempt to access your property after the storm until / unless local officials declare the area safely accessible.

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