Review Your Insurance Coverage Before the Spring Storm Season

Home Insurance Coverage and Spring Storm Season

As we enter the spring storm season it is a good time for homeowners to review their insurance policies and have a complete understanding of their coverage before a major storm hits. It is important to make sure you have a full understanding of what coverages you have as well as any gaps that may exist in your current coverage levels.

Here are a few things you should consider when reviewing your insurance coverage:

Floods Are Not Covered

Almost every standard homeowner policy excludes flood damage. If you want to be fully covered you will need a separate flood insurance policy and in some areas your lender may require proof of flood insurance.

Check your policy to verify that flood damage is excluded and look for any other exclusions.

Flood insurance can be purchased through the National Flood Insurance Program (NFIP) or through some private insurance companies. Cost can vary dramatically depending on where your property is located. Flood insurance is especially expensive on costal properties but if your home is destroyed by flood damage the cost of insurance will seem minimal compared to the cost of rebuilding.

If your home is in a high-risk flood area it is highly recommended that you carry a separate flood policy.

Check Your Deductible

Many homeowner policies for coastal properties or homes in high-risk areas for wind damage have a separate deductible for damage caused by hurricanes or other high wind events. The deducible amount is often not a set value but a percentage of the homes insured value. This can dramatically increase your costs so it is best to fully understand your deductible.

In most cases, the details of your deductible will be outlined in your “declarations” page. If you do not understand the deductible details, call your agent for further explanation.

Percentage deductibles vary but usually range between 1 and 5 percent of the homes insured value. As an example, a 1 percent deductible on a home insured for $350,000 means that you will need to come up with $3,500 in the event of damage from a hurricane or other major storm. If you push the deductible up to 5 percent you are looking at a $17,500 bill.

In most cases, a hurricane deductible only kicks in when a storm is categorized as a hurricane and named by the National Weather Service. These requirements can vary though so make sure you are familiar with the exact parameters of your policy.

Currently, nineteen states and the District of Columbia have hurricane deductibles.

Helpful Article: Home Insurance Deductible Savings Vary by State

Update Your Inventory

You should always keep an inventory of your insured property and update it on a regular basis. You should document all property but especially your more expensive items. Take photos, video and document serial numbers, date purchased and purchased price. There are a number of apps that can help you with this somewhat tedious process.

Always keep your inventory off site or in the cloud so you have access to it if your home is destroyed. It should be noted that most homeowner policies have value caps on expensive property such as jewelry, artwork, collectibles and even firearms and cigars. While the cap varies it is usually in the $1,500 to $2,000 range. If you have numerous high value items you may need a rider to fully cover your possessions.

Home Upgrades

Many insurance companies offer discounts for upgrading your home to make it more weather resistant.

Adding storm shutters, a sprinkler system or replacing your roof with wind resistant materials can all result in a discount. Contact your insurance company for details regarding their discounts and have your insurance agent perform a discount review to make sure you are receiving all available discounts.

Review Coverage Levels

The cost of rebuilding your home can change on a yearly basis, especially if building is booming in your area. If you have recently added square footage or upgraded your kitchen or bathrooms you should also review your coverage levels.

Talk to your agent to make sure you are carrying enough coverage to properly rebuild your home and replace your possessions. If you are under insured, up your coverage levels.

Helpful Article: Pros and Cons of Homeowners Insurance