If your home has ever received substantial damage as a result of a hurricane, then you know how traumatic and overwhelming the experience and the recovery can be. You learn quickly that being prepared for hurricane season happens long before June 1. It happens when you select your insurance coverage, with the types of coverage and the coverage amounts you choose. Continue reading to learn about the types of coverage that are available and how you can best protect yourself and your family if your home is hit by a major hurricane.
Understanding the Impact of Hurricanes
Hurricanes can impact you, your family, and your home in numerous ways. The most immediate impact is likely the damage done to your home and property. When strong winds and heavy rain pass through, they can cause downed power lines, broken windows, floods, downed trees, and much more. There is also the risk of storm surge at or south of the point at which the hurricane makes landfall. Storm surge can cause catastrophic damage to homes and make them uninhabitable for months to come.
In addition to property damage, you may experience both financial and emotional strain after a hurricane. Paying for all the repairs to your home or business can be expensive, especially if you don't have adequate coverage. Even if you do have good coverage, you may have to cover the cost of flood remediation up front until you receive a check from your insurance company. There are also other costs associated with being displaced from your home, such as hotel expenses, food from restaurants, or even laundry services.
The disaster recovery and financial stress can take an enormous toll on your mental health as you try to retain a sense of normalcy while being displaced from your home. Since hurricane recovery is a bit of a long game, as repairs may take months to complete, managing stress during this time is instrumental.
Types of Insurance Coverage for Hurricane Damage
When it comes to hurricane damage, there are four types of insurance you'll want to know about. These include:
Homeowners Insurance
Homeowners insurance covers some types of damage to your home, other structures on your property, and your belongings inside. You'll want to explore your specific coverage plan, as homeowners insurance varies from home to home and by where you live. For example, in Florida, most homeowners insurance policies will cover damage from hurricanes, including damage to your roof, walls, electrical system, HVAC system, and outdoor areas, but they will not cover damage from flooding, specifically.
Your homeowners insurance may also cover furniture, pools, clothing, electronics, and the costs for temporary housing if your home is uninhabitable. This makes it essential to carefully review your homeowners policy after a hurricane to see what's covered.
Flood Insurance
Flood insurance is often a separate plan from your homeowners insurance. This is because Florida law doesn't require homeowners to have flood insurance, similar to its requirements for homeowners insurance. That said, if you have a mortgage and live in certain flood zones, this type of coverage is required. Regardless of whether you are required to purchase this coverage, if you receive flood damage during a hurricane, you'll be glad you have the extra protection. Flood insurance covers your home and belongings from rising water that can cause damage. It can help to pay for the repair or replacement costs of your damaged property, significantly easing your financial burden after a hurricane.
Windstorm Insurance
Windstorm insurance, also known as wind insurance, covers your home in the event of damage from heavy winds, such as those you'd see in a hurricane. Most homeowners insurance policies will include windstorm coverage, but some homeowners may elect to exclude wind coverage from their plans. You'll want to make sure that you kept windstorm coverage within your homeowners insurance or see if you purchased separate windstorm coverage from another provider.
In Florida, homeowners are not legally required to have homeowners insurance, including windstorm coverage. However, most mortgage lenders require homeowners insurance, typically with a windstorm coverage requirement. So, if you have homeowners insurance for your home, it's likely that you have windstorm protection.
Business Insurance
Finally, there's business insurance. Business insurance can cover your business's physical location, along with important assets. For example, your business may rely on expensive equipment to operate. In addition, there's business interruption coverage, which reimburses you for lost profits during the time that your business was interrupted by the storm. Business interruption insurance can help you cover ongoing expenses and lost revenue, easing the financial burden until you restart operations.
Common Insurance Coverage Gaps
Due to the frequency of intense storms here in Florida, it's important to understand any gaps in your insurance coverage. One of the most common gaps is a lack of flood insurance. Many homeowners assume that their homeowners insurance covers flood damage, but this isn't always the case. Damage from flooding, often caused by storm surges, requires a separate policy through the National Flood Insurance Program (NFIP) or a private insurer. Additionally, some Florida residents choose to waive contents coverage or purchase an NFIP policy without contents coverage in order to lower the cost of premiums. However, this is generally not a good idea if you live in Zone A, where your risk of storm surge is higher.
Similarly, windstorm coverage is another common gap. Some homeowners insurance policies, commonly in coastal areas, exclude damage from wind. Be sure to check your homeowners insurance policy for the specifics, as the wind can cause significant damage to your home during a hurricane.
Hurricane Insurance Deductibles
It's also important to understand how deductibles work in relation to hurricane insurance. Hurricane deductibles are a specific type of deductible that apply when a named hurricane causes damage. Unlike standard deductibles, which are usually a fixed amount, hurricane deductibles are typically a percentage of the insured home's value—often ranging from 1% to 5%. This is a higher value than the standard deductible, which can lead to unexpected costs. It's, therefore, essential to understand this cost and plan for potential out-of-pocket expenses ahead of hurricane season.
How To Ensure Adequate Hurricane Coverage
To ensure adequate hurricane coverage, start by reviewing your insurance policy to understand what it includes and excludes. Homeowners should verify that wind and flood damage are covered, as standard policies often require separate flood insurance. Assess the amount of coverage based on current property value and repair costs. Also, consider your flood zone and whether you should include contents coverage with your flood insurance policy.
Next, make sure you have enough to cover potential rebuilding costs, not just the market value. Consider hurricane-specific deductibles and set aside funds for out-of-pocket expenses. Work with a knowledgeable insurance agent to tailor coverage to your needs, especially in hurricane-prone areas. Finally, regularly update your policy to reflect any property improvements.
Explore Hurricane Insurance Coverage in Southwest Florida
Ensure you're financially protected during hurricane season by getting comprehensive coverage for your home and business. Investigate your current insurance coverage, looking for any gaps. If you see that you're missing essential coverage, reach out to your insurance agent for more options.