Hurricane insurance

An approaching hurricane is not the time to discover that you don’t have enough home insurance. 

Once the federal government issues a tropical storm or hurricane watch, insurance companies don't allow homeowners to obtain new or additional insurance coverage. 

Instead of nervously checking your insurance documents in the midst of hunkering down for a storm, make sure you have enough home insurance and other coverage. That coverage may also include windstorm insurance and flood coverage. 

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Review your policies and looks for any insurance gaps before hurricane season starts. That includes checking your insurance deductibles and making sure you have enough money to cover deductibles if you need to file a claim. 

To truly know how to arrange your coverage, you need to understand how various insurance policies work in the event of storm damage. Here are answers to common questions on hurricanes and homeowners insurance.

Does homeowners insurance cover hurricane damage?

There is no such coverage called hurricane insurance and not one insurance policy covers all of the possible damage a hurricane can cause to your home. Instead, you may need a mixture of policies – home, wind and flood, which serves as your hurricane insurance.

Where you live can impact your hurricane insurance needs. A standard homeowners insurance policy covers damage caused by windstorms, hurricanes and hail in most of the U.S., provided you don’t waive the coverage. But if you live near the coast, an insurance company may require separate windstorm insurance or wind and hail insurance to receive protection for damages from wind or wind-blown water.

Ask your home insurance company about windstorm insurance and whether your homeowners policy protects you for that hurricane damage so you know if you have enough hurricane insurance.

What types of damage are not covered by hurricane insurance?

Homeowners insurance doesn’t typically cover flood damage. You may also need to buy windstorm insurance if your home insurance is a named-peril policy that only covers listed dangers, such as theft and fire.

Having coverage through your home policy or the windstorm rider allows you to make claims for storm damages, such as:

  • Blown off shingles
  • Downed trees
  • Windows shattered
  • Rain entering your home as a result of wind damage (such as roof damage or broken windows)

You should evaluate your homeowners coverage to ensure your home and personal belongings are insured for the amount it will cost to replace them. If the hurricane destroys your home, your home insurance policy will cover you for additional living expenses.

Your homeowners insurance won't cover hurricane-related damage to your automobiles. Instead, your car insurance’s comprehensive coverage (provided you have such coverage) would handle that protection. 

Does flood insurance cover hurricane damage?

If a hurricane causes flooding, your homeowners insurance won't cover the ensuing damages. Rising water – in effect, any water that enters the home from the ground – is considered flood water. Flood water is only covered by a separate flood insurance policy. The National Flood Insurance Program (NFIP) offers flood insurance. Private companies also provide flood coverage. 

You should evaluate your homeowners coverage to make sure your home and personal belongings are insured for the amount it will cost to replace them. If the hurricane destroys your home, your home policy will cover you for additional living expenses. Your homeowners insurance won't cover hurricane-related damage to your automobiles. Instead, your car insurance’s comprehensive coverage (provided you have such coverage) would handle that protection. 

You need flood insurance if you’re likely to need coverage for water that enters your home from the ground. Your home or windstorm insurance won't cover damage resulting from:

  • A storm surge
  • Pooling of water due to heavy rain
  • Water from a swollen creek, river or lake

If the ground is saturated and the water rises or seeps into your home, it's considered a flood by insurers.

The flood-damage exclusion in standard homeowners policies often comes as an unpleasant surprise to victims of rising waters.

"This is the biggest misperception that homeowners have," says Michael Barry, a spokesperson for the Insurance Information Institute (III). And it only gets worse if there is a dispute after a storm if the water intrusion resulted from wind damage (blowing in water) or flooding.

"You want to get a flood insurance policy, so there's no dispute over the origins of the water damage," says Barry.

Flood damage can be costly to repair. As a result, private insurers largely have dropped that coverage. Instead, the government-backed NFIP offers flood insurance.  

What protection does National Flood Insurance Program insurance provide?

Here are some key things to know about the NFIP, which is a federal program from the Federal Emergency Management Agency:

  • A flood policy comes with a 30-day waiting period from the time of purchase before it goes into effect. In other words, don't wait until a hurricane is developing in the Atlantic Ocean before getting insurance. 
  • Building property (structure) coverage tops out at $250,000 for residential buildings ($500,000 for commercial).
  • Personal possession coverage is capped at $100,000.
  • Damage to basement improvements, decks, pools, walkways, trees or shrubs (landscape) isn’t covered.
  • Additional living expenses you incur due to losing the use of your flooded home – such as hotel and food expenses – aren’t covered by this flood policy.

Supplemental flood policies are also available from some private insurance companies around the country, says Jeanne Salvatore, senior vice president at the III.  However, you can only buy excess flood insurance, which comes with much higher limits, after you have purchased a base NFIP flood policy.

Are there special deductibles I must pay for hurricane insurance claims?

A hurricane-prone areas often have hurricane insurance deductibles associated with home insurance claims. To limit their losses, insurance companies in coastal states have homeowners take on more of the risk by attaching higher, percentage-based hurricane deductibles instead of a flat-dollar deductible. 

According to the III, 19 states and the District of Columbia have hurricane insurance deductibles:

  • Alabama
  • Connecticut
  • Delaware
  • Florida
  • Georgia
  • Hawaii
  • Louisiana
  • Maine
  • Maryland
  • Massachusetts
  • Mississippi
  • New Jersey
  • New York
  • North Carolina
  • Pennsylvania
  • Rhode Island
  • South Carolina
  • Texas
  • Virginia

Those coastal states are also most likely to suffer from hurricane damage.

What are hurricane insurance trigger events?

A "trigger" event puts hurricane insurance deductibles into effect. Triggers vary by state and insurance company.

For example, in Connecticut, the legal trigger is when the National Weather Service (NWS) declares a hurricane that records winds of 74 miles per hour or more anywhere in Connecticut. The hurricane deductible remains in effect until 24 hours after the last hurricane warning terminates for any part of the state or 24 hours after the hurricane is downgraded from a hurricane by the NWS.

What are typical hurricane insurance deductibles?

Remember, your deductible is the amount you pay out-of-pocket before your insurance pays its share for a claim. Hurricane percentage deductibles typically run from 2% to 5% of your home’s insured value. They can be even higher. For instance, Florida allows up to 10%.  So, these costs can be significant.

Let's look at an example. Say your home is insured for $350,000 with a 2% hurricane deductible. This would make you responsible for the first $7,000 of repairs. A 5% deductible would push it to $17,500.

In Florida, your hurricane deductible is applied on an annual basis. This means if you had to submit multiple claims due to multiple storms, you’d only have to meet the hurricane insurance deductible once a calendar year. Once you reach the hurricane insurance deductible, the insurer can only apply your normal homeowners insurance deductible, which is typically a flat amount and significantly lower.

“Deductibles vary from company to company and state to state, so everyone needs to read their policy or speak to an agent or company representative to find out exactly what the hurricane deductible is and when it applies,” Salvatore says.

You should find your deductible information on the declarations page of your home or windstorm policy.

How much does hurricane insurance cost?

You need both homeowners insurance and flood insurance to have complete hurricane insurance coverage as long as your home policy covers wind damage. 

Flood insurance costs vary by location. A home in a flood zone will cost more than one not considered risky. 

The average cost of flood insurance from the NFIP is about $700. However, a low-risk home might get covered for $200, while a riskier place may cost thousands each year. 

The average home insurance cost is $2,305 for a policy with $300,000 dwelling coverage, $300,000 liability and a $1,000 deductible. However, you can pay much higher or lower rates depending on your location.

On average, Oklahoma has the highest average rate ($4,445), while Hawaii is the cheapest ($1,806).

Here are the average home insurance costs for states that are at a higher risk of hurricanes:

  • Alabama -- $2,981
  • Florida -- $3,643
  • Georgia -- $2,555
  • Louisiana -- $3,270
  • Mississippi -- $3,340
  • North Carolina -- $2,209
  • South Carolina -- $2,678
  • Texas -- $3,429

The good news is that flood insurance usually costs much less than a homeowners policy. However, it depends on where you live and your home’s risk. 

If you live in a flood zone and in a location that regularly sees hurricanes, you could wind up paying thousands of dollars annually for flood insurance. On the other hand, if you live in a home outside of a flood zone in an area that doesn’t see much extreme weather, you may only have to pay a couple of hundred dollars annually for flood coverage. 

Can you get hurricane insurance during hurricane season?

You can buy hurricane insurance at any time of year unless these's a storm barreling down on your area. Flood insurance policies also don't immediately take effect. 

Flood insurance policies don’t begin until 30 days after you buy the policy. Delaying the start of a policy for 30 days means a new policyholder can’t wait and get a policy as a hurricane barrels toward them.

Instead, you need to have a flood policy in place for 30 days.  

Is my home covered for hurricane damage if I leave it?

Hurricane insurance, including home, windstorm and flood insurance, apply whether you stay or evacuate your home. You should, however, prep your home if you flee from the storm (and remember to take insurance paperwork with you so it can’t be damaged or go missing in the hurricane). 

If you have storm shutters, put them on or use plywood to cover the windows. If it’s safe to do, move loose outdoor items inside, such as patio furniture, potted plants and garbage cans, so they won’t become flying projectiles.

It’s also wise to unplug appliances and turn off electricity and the main water valve. If you’re ordered to evacuate or you leave on your own, tell someone — a friend or relative not in the storm-affected area — where you’re going. And don't forget to take your emergency supplies, warm clothing, blankets and sleeping bags.

Insurance doesn’t cover expenses incurred for evacuating. However, if you come home and find your home unlivable due to covered hurricane losses, a standard home policy covers additional living expenses.

What should I do after the storm hits?

Once it’s safe to return home, you should promptly do so. Document the damage with photos or video if possible. Take measures to prevent further damage to your home. For example, if a window is broken, seal it to prevent more water from coming in. If you have a hole in your roof, place a tarp over it. 

If you fail to take reasonable measures to stop damage from occurring after a storm, your insurance company may refuse to pay for the added costs. 

Keep a record of any temporary repairs and save receipts for all expenses, such as buying plywood and nails to board up a broken window. You’ll need the information when you file an insurance claim. 

Here are some additional claim tips:

  • Immediately notify your insurance company of your loss and submit a claim. Insurance companies and their adjusters may be swamped with claims after a storm and you don’t want to be at the bottom of their lists. Promptly provide any documentation your insurer asks for to keep the claim moving along.
  • Take inventory of your personal possessions and property. The easiest way to do this is to compare an inventory list that you prepared before the disaster to your new list – before-and-after photos and video are very helpful to insurers. Collect any receipts or proof of payment that proves the value of damaged items. 
  • Keep detailed records. Document your conversations and insurance contact information. Make sure to jot down your adjuster’s name and contact information. List the dates, times and descriptions of your conversations with your insurer, adjuster and those repairing your home. 
  • Obtain repair estimates from trusted contractors. Get written bids – including details of materials to be used and prices on a line-by-line basis – from licensed contractors. This can speed up the claims process. Permanent repairs shouldn’t be made until insurers have inspected your losses. Keep all damaged personal property until an insurance settlement has been reached.
  • Keep receipts. If you make temporary repairs or have to relocate from your home while i’s being repaired, keep records of your expenses since they're likely to be covered by your homeowners policy.
  • Negotiate. If you don’t think you’ve been offered a fair settlement, don’t be afraid to negotiate with your insurer. If you can’t come to an agreement, you can take action by consulting an attorney or hiring a licensed public adjuster to act on your behalf. You can also contact your state’s insurance regulator to check on your consumer rights and make a complaint if necessary.