Hurricane Dorian has many American residents thinking about hurricanes once again. The past few hurricane seasons have been record-setting and, if you’re an American who lives in a coastal area, eye-opening. As a result, more people than ever before are asking themselves “What do I need to know about hurricane insurance?” We’re here to help. These are the four most important things every American homeowner needs to know about hurricane insurance.
The truth is that the most devastating part of a hurricane is usually the flooding that it brings along with it. Since flood insurance is not included in most homeowners insurance policies, it’s imperative to have a proper flood insurance policy if you live somewhere that is at risk of hurricanes.
Typically, flood coverage is purchased through the National Flood Insurance Program. However, as a result of the pervasiveness of flooding in the U.S. today, the private flood insurance market is growing rapidly. Take the time to call around and do your research so you can find a plan that provides you with the coverage you need, at a price you can afford.
Full Replacement Cost
A common misconception that many people run into when setting up insurance coverage for their property is that full replacement cost means the value of your home. When insurers ask for the full replacement cost they don’t mean how much your home is worth. What they actually want to know is the total cost of completely rebuilding your home should the property get totally wiped out. This number is often significantly higher than the actual value of the home.
If you purchase an actual hurricane policy, it is incredibly important to understand that hurricane deductibles are usually percentage-based, not a flat fee. That means while most insurance policies offer a flat-fee deductible like $1000, if you file an insurance claim your deductible will be a percentage of the total cost of the claim.
For example, if your home costs $300,000 to rebuild and your hurricane policy has a common deductible like 5%, you will have to pay $30,000 out of your own pocket before your policy kicks in. When purchasing a hurricane policy always do the math to make sure your finances are such that you can afford your deductible should you need it. Otherwise, your fancy insurance policy won’t help you at all.
You can’t file a claim to replace something that you don’t know is lost, or didn’t factor into your coverage beforehand. That’s why it is incredibly important to have an up-to-date inventory of everything in your home, as well as the approximate value of everything.
A really easy way to get an accurate inventory is to take a video of your home, including what’s in each closet etc. This is an easy and accurate way to prove your ownership of certain items, even if they are lost during a severe weather event.
The world has always been at the mercy of mother nature, but climate change seems to have accelerated the severity and frequency of natural disasters. As a result, people need to do what they have always done: adapt. That means investing in the proper insurance policies to protect your property and your finances.
To learn more about your current policy, or your options for a new one, talk to the staff at TGS Insurance by visiting www.tgsinsurance.com.