Hurricane Season 2022: Are You Prepared?
Hurricane season starts on June 1st, and runs all the way through November 30th, believe it or not. With one tropical depression already brewing in the Gulf of Mexico, we could have our first named storm before the end of the week.
Every year, it is important to assess your hurricane preparedness. There are some great resources out there about supplies to have on hand and best practices for safety in a storm. We’ve linked to a guide from FEMA at the end of this article. But as insurance professionals, we want to cover the insurance coverage you need to be prepared this season.
Do you have flood insurance? What is your homeowner’s policy deductible? Is it different for named storms, or all wind damage?
If you don’t know the answers to these questions, now is the time to talk to your agent to find them. The worst time to find out you have a 3% wind and hail deductible is after you file a claim.
Let’s talk about the different coverages you need for your home going into Hurricane season.
The first big one is flood insurance. Homeowners policies do not cover damage from flooding. This sometimes surprises people, but it is a very important detail of your policy to keep in mind. Anywhere it can rain, it can flood, even if you don’t think you’re in a ‘flood zone’. The fact is that every home is in a flood zone, and there are different zones according to different levels of risk. In the highest risk zones, lenders require anyone with a mortgage to have flood insurance on their home, but most homes are not in the highest risk zones, so a lot of people go without. And as a result, every year, there are many homes damaged or destroyed by flooding that are not covered by any policy.
We recommend every homeowner purchase a flood insurance policy. Flood policies issued through the National Flood Insurance Program are backed by the federal government, and are the exact same price, no matter what agent you buy it from, so you don’t have to waste time shopping around. You do have different options for the amounts of coverage you can purchase, as well as the policy’s deductibles, so a conversation with your agent is a good idea, to help assess your needs. Once you purchase a policy, there is a thirty-day waiting period before the policy is active, meaning no claims will be paid for a loss that occurs before that thirty-day period had passed. Once a storm is on the way, it is too late to buy insurance.
A NFIP flood policy will provide protection for your home and its contents, and policies for renters, that cover just your belongings are available as well.
However, as you know, flooding is not the only risk posed by a hurricane. The other major one is damage from wind.
Do you know your policy’s wind and hail deductible?
Some homeowner’s policies have a single deductible for all perils. Usually, around $1000 or so. However, most policies have a separate deductible for wind and hail losses. It may be a different dollar amount, or more commonly, a percentage, like 2% for example.
It is very important to note that this percentage is a percent of the insured value of your home, not a percentage of the claim amount. If you have a home insured for $300,000, and you have a wind claim that does $10,000 in damage, and you have a two-percent deductible, your deductible would be $6,000, not $200.
We have seen policies with even higher percentages than that for a deductible, sometimes five and ten percent, although this is much less common. If you don’t know your deductible, you need to find out. If it is too high for you, you may have options. Some companies may offer policies with a lower deductible. If they do not, your agent can help you look for other companies that might offer a lower deductible than your current policy.
Again, time is a factor here. Insurance companies issue what are known as “binding restrictions” when hurricanes are forecast to impact certain areas, meaning that agents in those areas cannot write new policies or make changes to existing ones during the restriction. This is why it is important to know your deductible now, while you have an opportunity to make changes if you think that is best. Even if you don’t want to make any changes, it is good knowing in advance, so you can plan for potential expenses.
Hurricane season is half of the year, and it peaks in mid-September, meaning we still have a long way to go. Make sure you are protected.