Named Storm? – Get Home Insurance Coverage Now!

Home Insurance Now – Hurricane Season

The 2017 hurricane season was one of the busiest and most destructive ones on record. There were 17 named storms that hit the coasts and caused roughly $282.16 billion in damage. If you were affected by one of these storms and not carrying the proper insurance coverages you could end up on the hook for the cost of repairing or replacing your home and possessions.

Industry experts recommend reviewing your insurance coverages and making adjustments well before the hurricane season begins. Once a storm forms and reaches certain thresholds, it becomes almost impossible to purchase new coverage and in many cases, even adjusting your coverage limits can be difficult.

Here is everything you need to know about how easy, or more accurately, how difficult it can be to purchase an insurance policy once a storm is headed your way.

Flood insurance

A standard homeowners policy doesn’t cover flood damage and unfortunately, flood damage is usually pretty significant during a hurricane or other named storm. According to Hurricane Harvey statistics, the storm that hit Houston last year left 70 percent of Harris County (where Houston is located) under a foot and a half of water. The county is 1,800 square miles wide.

When it comes to flood insurance, if you are not covered prior to the storm forming, you are out of luck. Flood insurance backed by the National Flood Insurance Program (NFIP) comes with a waiting period of 30 days before it takes effect so if you have waited until a storm is named you will not be covered.

In most cases, private insurance companies that sell flood coverage also have a waiting period for coverage to start. While it may be less than 30 days, it is often in the 10-15 day range, putting coverage out of range if the storm is already named. The majority of insurers stop selling flood insurance policies as soon as a storm is named, making it very difficult to obtain this important coverage once a storm has spawned.

Flood insurance can be a financial lifesaver if a hurricane hits as flooding causes significant and very expensive damage. If you live in a flood or hurricane prone area you should absolutely be carrying a flood insurance policy, and purchase it well before a storm forms.

Homeowners Insurance

In most cases, you are out of luck if you are hoping to purchase a new policy once a storm is named, or even if a hurricane watch has been issued.

Homeowners insurance policies are not typically issued quickly, they often require an inspection or evaluation, which can take time. In addition, most insurance companies will stop selling new policies as soon as a hurricane watch is issued. The rules regarding when an insurer will stop selling polices do vary so it never hurts to call.

However, if you already have coverage you may be able to change your coverage limits in the lead up to a hurricane or other major storm but once a storm is named, most insurers lock out changes on policies.

If you feel you are underinsured and want to change your policy limits or add coverages call your agent as soon as possible once a storm seems possible.

Windstorm Coverage

A standard homeowners policy covers wind damage but in some coastal states, you may need a separate policy to cover wind damage. In Florida, Texas, Georgia, South Carolina and a few other states where hurricanes are common a standard homeowners policy may not cover damage done by wind.

Much like homeowners and flood insurance, if you wait too long to buy a windstorm policy, you may be out of luck. Most windstorm policies come with some kind of waiting period but it varies by state and insurer.

As an example, in Connecticut and South Carolina windstorm policies don’t go into effect for 15 days. In most coastal states, it is almost impossible to purchase a windstorm policy once a hurricane is named.

Hurricane Deductibles

Even if you manage to purchase a homeowners policy at the last minute, if you live in a coastal state you may be facing a higher, percentage based deductible for hurricane damage.

According to data from the Insurance Information Institute (III), 19 states and D.C. have hurricane deductibles. These states include: Alabama, Connecticut, Delaware, Florida, Georgia, Hawaii, Louisiana, Maine, Maryland, Massachusetts, Mississippi, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, South Carolina, Texas and Virginia.

Percentage deductibles vary by insurer but expect between 2 and 5 percent of the insured value of your home. If, for example, you are carrying $350,000 in coverage and have a 2 percent deductible you will be forking up $7,000 for repairs and if it is a 5 percent deductible you would be responsible for $17,500.

Hurricane deductibles are triggered by events, in most cases when sustained wind speeds reach a certain speed. If your policy has a hurricane deductible make sure you can manage the deductible in the event a hurricane strikes.

The Bottom Line

In most cases you will not be able to purchase the coverage you need once a hurricane has formed and is headed toward land.

You should have all of your insurance policies in place well before hurricane season starts unless you are wealthy enough to rebuild your home and replace all of your possessions.

While your mortgage lender will require that you protect your home with the proper insurance, even if you own your home outright, properly insuring it is highly recommended. Hurricanes can severely damage or completely destroy your home in a matter of minutes and without insurance you will be on the hook to rebuild your home and replace a lifetime of possessions.

While fully insuring your paid off house may cost a few thousand dollars a year, the cost to rebuild and replace everything you own will most likely run in the hundreds of thousands of dollars. Unless you can easily afford this kind of expense, properly insuring your home (before a storm arrives) is the best course of action.