As victims of Hurricane Sandy and other storms found out, insurance companies were overwhelmed by calls from thousands of claimants after the storm. It turned out that after a long wait, many people had claims closed without payment. Often, the cause of the denial was that their insurance was insufficient or it did not cover the type of damage that occurred. Common situations were that homeowners failed to have flood insurance, while businesses did not have flood insurance or business interruption insurance.
Now is the time to review your insurance policies and make sure you have adequate coverage for the next hurricane that comes your way. Here is what you should know, so you can make the right policy decisions to protect yourself.
Be Prepared Before a Storm
Being prepared before a storm hits your area is the most important thing you can do and that preparedness involves a lot more than buying bottled water and securing the hurricane shutters. Here are four insurance-related tasks to do before the next hurricane comes:
- Make sure you have flood insurance. Considering that restoring a 2,000-square-foot home with six inches of water damage averages $40,000, you can quickly go through your savings without insurance. Since Florida participates in the National Flood Insurance Program (NFIP), you can obtain flood insurance through a network of private companies who write flood insurance in the state. The basic policy covers rebuilding costs up to $250,000 and loss of possessions up to $100,000, with more coverage available for higher-value homes. There is a 30-day waiting period before flood insurance takes effect, so now is the time to buy it if you don't have it.
- Review all of your insurance papers to verify what is covered. You also want to take a look at the amount covered and the terms and conditions of the policies. Your homeowner’s policy, flood insurance policy, and auto insurance policy all have exclusions. Make sure you will have adequate coverage in the event that you have to file a claim against all of them. Also ensure you have additional coverage for high-value items such as artwork and jewelry, as these are not covered by federal flood insurance. If you have a business, make sure to do this review for your company, too.
- Verify the deductible on all parts of your policy. You may have a hurricane-related wind damage deductible that is a percentage of your home's value, rather than a flat amount. This means if you have a $300,000 home and a 5% deductible, you'll be liable for $15,000 before the insurance company pays a dime. To reduce your out-of-pocket costs after a disaster, check with your insurance company. See if you can get a flat rate deductible for a slightly higher premium, as this can be worth it in the long run.
- Consider adding sewer backup insurance. You want to make sure you're covered if local sewers overflow. Your flood insurance only covers sewer backup that results from flooding, while your standard home insurance policy may not cover it without an endorsement on your policy. You can obtain this coverage for about $50 per year.
If you have a flood in your area and end up facing high out-of-pocket costs, you may be able to get low-cost loans from FEMA to aid in repairs and help fill the gaps in what your insurance covers. But these are loans, not grants, so you will have to pay the money back over time. Carrying adequate insurance can help you avoid those kinds of financial programs and is the best way to recover and move on with your life in the case of a hurricane.
Call Storm Solutions, Your Ally In Storm Preparation And Recovery
Between your homeowner’s insurance and your flood insurance policies, you will have funds available to repair and replace storm-damaged windows and doors. If you live in the Naples/Marco Island, Fort Myers/Cape Coral, or Port Charlotte/Punta Gorda areas of Florida, Storm Solutions is a fully licensed and insured general contractor who can assist you in restoring or equipping your home with hurricane protection. You can check our website to see a complete list of our services or call us at 239-431-3190.