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Does Homeowners Insurance Cover Hurricane Damage?

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The hurricane season runs from June through November in almost half of US states, especially along the Atlantic and Gulf coasts. The best time to check your home insurance to make sure your home is protected is before hurricane season. If a powerful hurricane rips through your area, it can leave behind thousands of damaged homes. This is why you should take prompt action and make sure you consult your insurance company to find out if you have adequate protection. This guide will focus on hurricane protection on home insurance HO-3 and HO-5 plans (the most common insurance in the US).

Does home insurance cover hurricane damage? Yes, hurricane damage is covered in home insurance plans in the United States. All damage to the home that was caused by hurricanes will be covered under standard HO-3 and HO-5 homeowner policies. The only exceptions are flood and hail damage. If you live in a flood or hail-prone area on the East Coast or the South, you may have to purchase separate insurance coverage. There are 19 states where flood insurance is not included by default.

Hurricane Coverage For Homeowner Insurance

More than 70 million households in the US are insured by HO-3 insurance. This is a standard home insurance policy that includes a set of perils such as storm damage, under which hurricane damage is covered. Storm damage includes damage from winds, rain, and hail in most cases. The main exception in hurricane-prone states is flooding. In some states like Oklahoma, hail damage is not always included. 

If the storm surge leads to an increase in water levels that ends up flooding your home, you likely won’t be covered unless you purchase separate flood coverage. This is recommended in states with a history of floods such as Florida and Louisiana. Insurance companies will offer you the option to purchase flood insurance as an independent policy or add supplemental coverage to your existing policy.

States With Hurricane Deductibles: 19 States

Most households affected by floods are located on the East Coast and the Gulf Coast. If your state is hurricane-prone, the insurance company may charge you hurricane deductibles which you pay out of pocket. These deductibles are the costs you have to pay before the insurance picks up the tab on the rest. Read below to learn how deductibles are calculated. If the National Weather Service announces an incoming tropical storm, the insurance company can place a moratorium on all hurricane deductibles. 

The following 19 states have HO-3 policies with hurricane deductibles that homeowners have to pay before filing a claim (in alphabetical order):

  1. Alabama
  2. Connecticut
  3. Delaware
  4. Florida
  5. Georgia
  6. Hawaii
  7. Louisiana
  8. Maine
  9. Maryland
  10. Massachusetts
  11. Mississippi
  12. New Jersey
  13. New York
  14. North Carolina
  15. Pennsylvania
  16. Rhode Island
  17. South Carolina
  18. Texas
  19. Virginia

If you’re on the market for home insurance, the insurance company in these states will give you the option to choose a set hurricane deductible that you’ll pay once you file a claim or have no deductible at all. If you choose not to have a deductible, it is essential the same as not having any hurricane protection at all.

If home is flooded in a hurricane you’re not going to get compensated. You’ll have to pay for the drainage, mold removal, and other repairs out of pocket (these can cost thousands of dollars). This is why it’s best to seek out companies with favorable flooding deductibles.

Pro Tip: Arrange the hurricane deductible in advance because all insurance companies freeze policies once the National Weather Service officially names a storm – this is to avoid paying billions of dollars in damages. If an insurance company issues a moratorium, they are bracing for massive damage and this means that all new or existing customers are unable to update their policy. If you don’t update your policy before the hurricane season, you may not have the coverage you need to protect your home.

How Hurricane Deductibles Are Calculated

Hurricane deductibles are different to all other deductibles. For instance, a fire deductible has a fixed fee. If half of your home burns down, you’ll only have to pay a fixed $1,000-2,000 deductible before the insurance company pays the rest. A hurricane deductible is actually calculated on percentage points depending on the risk your home poses for the insurance company. 

The hurricane deductible amounts to 2-5% of the total value of the home. 

The insurance company will deploy an adjuster to your property to estimate the deductible percentage based on the risk factor. If you have a waterfront property, you’ll pay a very high deductible. The lowest hurricane deductible is 2%. Example: A home valued at $500,000 located inland will pay a $10,000 deductible while a home in proximity to water will pay a $25,000 deductible.

The hurricane deductible does not kick in if there are no major hurricane warnings. There has to be a certain event announced by an official source such as the National Weather Service before the hurricane deductible kicks in. There are only a few states like Florida which have an annual hurricane deductible. 

The hurricane deductible is paid on a one-time basis. Homeowners can’t be hit with a deductible for each storm if their home is damaged already. This is a prevention mechanism to safeguard the best interests of homeowners in these states.

Hurricane Deductibles May Be Expensive

Hurricane deductibles may range from 1% to 5% of the insured value of the structure of the home. This amount will be paid out of a home insurance policy holder’s pocket. Not everybody can afford to pay for hurricane deductibles. If this is the case, it is recommended that you talk with the insurance company and ask for options.

There are four main categories in a standard homeowners insurance policy coverage. These categories are :

  • The structure of the home – this refers to the dwelling place
  • Personal property – personal assets like your belongings and everything inside your home
  • Detached units – are structures separate from the dwelling place like a shed or a garage
  • Living expenses – a homeowners insurance must cover living expenses. This happens when you are displaced. If your home is damaged, and it is not fit to live in at the moment, your insurance can cover expenses incurred while you are staying somewhere else or pay for your temporary stay in a hotel

What To Do If You Don’t Have Hurricane Insurance

The insurance company might deny you the ability to purchase hurricane insurance based on the risk factor. In this case, you can purchase insurance directly from FEMA. FEMA has a national hurricane insurance program called NFIP

Hurricane damage that causes billions of dollars worth of damage on an annual basis. If you want to be protected, make sure you reach out to your insurance company or FEMA and lock down a flood insurance policy or purchase a hurricane protection policy with a favorable deductible before the hurricane season. This is the only way to ensure your home is protected in the event of a hurricane. 

Home Insurance Claims For Hurricane Damage

Hurricane insurance is one important detail which you must look into when getting home insurance if you live in a place which is frequently visited by hurricanes. Most homeowners insurance include hurricane coverage. There are two factors which insurance companies look into when policyholders claim for hurricane coverage.  In cases where the homeowners insurance you have does include hurricane insurance, the insurer looks into the causes of the damage.

Damage by hurricanes may be caused by two factors: flood and windstorm.

Windstorm Coverage

For coastal states, most insurance companies require separate windstorm coverage to lessen risks. If your home is damaged by a hurricane, windstorm coverage has percentage deductibles rather than fixed dollar amount deductibles. If your home insurance does include windstorm coverage, its claim may be limited.

Flood Coverage

Homeowners insurance usually does not have flood coverage. If a homeowner wants to have flood insurance, he must avail of it separately. But if the flooding is caused by damaged plumbing due to the hurricane, then it may be covered by your home insurance.

Situations Where Homeowner Insurance Covers Hurricanes

Homeowners insurance generally does not cover damages caused by hurricanes. If it is due to windstorm or flooding, you must have separate insurance for it so you can claim for the damages. But there are situations where homeowners insurance can cover damages caused by hurricanes.

Sewer Backup

Sewer backup may be added to your policy. Usually, it is not included in your home insurance, but you can make endorsements for it. In cases where sewer backup is caused by heavy rainfall due to a hurricane, it would be best if you had a sewer backup and flood coverage for it.

Wind

Just like a flood, the wind is not covered by home insurance if it is caused by a hurricane. But you can get separate coverage for it, especially if you are living in an area where hurricanes are frequently happening. 

But if the damage to your house is caused by strong winds alone, then it may be covered by your homeowners insurance. An important point to remember, study and understand your insurance documents properly. If you think you do not understand it, you can always ask your insurance agent to explain it to you in words you can comprehend.

Evacuation

Evacuation means relocating temporarily. This usually happens if you and your home is threatened by a coming hurricane. Expenses incurred during the temporary relocation is not covered by homeowners insurance. But upon returning to your home, and you found out you cannot live in it, then your home insurance can cover the expenses of your living elsewhere. Your insurance policy has an additional living expenses portion. This is what the insurer will use to pay for your temporary stay in a hotel and other expenses incurred by living elsewhere.

Water Damage

Homeowners insurance cover water damage. But it must be due to a burst pipe, or rain coming through a window damaged by debris. For flooding due to a hurricane, you have to make sure you have a separate wind and flooding coverage so the damages may be covered by your insurance policy.

Important Things To Remember When Getting A Homeowners Insurance

It is a must for every homeowner to get home insurance. But this not means you just go to an insurance company or an agent and buy a homeowners insurance outright. 

A homeowner must be careful and meticulous when choosing a homeowners insurance to get. There are some very important things a homeowner must remember when doing this:

Understand Your Insurance Policy

Know about what is included and what is not in your homeowners insurance policy coverage. Especially the exclusions page. Read and understand about what is excluded from your house insurance coverage.

Flood Insurance

standard homeowners insurance does not normally cover flood, even those caused by hurricanes.

For Condominiums And Renters, A Special Coverage Is Needed

In this case, legal advice is needed. You can consult the condominium association’s attorney or the property management company. They can advise and guide you on what insurance policy to get.

If you are in a hurricane-prone area, it is advisable that you insure your home. But do not get just any home insurance. Make sure you know everything about the insurance coverage, especially its exclusions. Note: If you find homeowners insurance hard to understand, ask the help of an insurance agent or somebody who is knowledgeable about it.

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