Dartanian Stovall looks at the house that collapsed with her during the height of Hurricane Ida in New Orleans.
Michael DeMocker | USA Today Network via Reuters
If you’ve weathered the destruction from Hurricane Ida along the Gulf of Mexico coast, you might want to consider whether you’re ready for the next major hurricane to hit your neighborhood.
Part of that assessment should be a review of your home’s insurance coverage.
While home insurance policies cover some forms of damage caused by weather events, they do not cover everything. And, there may be different deductibles that apply depending on the particular cause of the loss.
“Check with your insurance agent,” said Spencer Haldin, co-chairman of Ericsson Insurance Advisors. “And don’t do it two days before the storm hits because at that point the requested changes are unlikely to be accepted.”
Ida, which hit Louisiana on Sunday as a Category 4 hurricane with maximum sustained winds of 150 mph, follows two other devastating storms in recent weeks – Fred in the southeast and Henry in the northeast. As temperatures rise and there is more humidity in the air, massive storms – some of which stop and cause torrential rains – have become more frequent in recent years.
The hurricane season in the Atlantic begins June 1 and ends November 30. However, the peak is in September. Last year, a record 30 hurricanes were named, 12 of which made landfall in the United States.
Here’s what to consider when reviewing your coverage.
your risk of flooding
Home insurance policies generally exclude flooding from coverage. Yet even just 1 inch of water in your home can cause up to $ 25,000 in damage, according to the Federal Emergency Management Agency.
Additionally, 1 in 4 flood insurance claims come from outside a high-risk area.
“While you can’t live by a lake or a river, that doesn’t mean you can’t have groundwater damage in your home,” Houldin said.
For coverage, you will need separate flood insurance through the federal national flood insurance program or a private insurer. Be aware, however, that there are exclusions and limitations of coverage. And, it typically takes 30 days for flood policies to take effect.
The average annual cost of the government program is $ 734, although this can vary widely by location.
“I think the way these weather conditions have become, people should be thinking more about flood insurance policies,” Holdin said.
Different losses, different deductibles
While many types of disasters are covered under the standard portion of your policy, some weather-related events are covered by a separate portion with a separate deductible.
If you live in a state along the East Coast or the Gulf of Mexico, chances are your home insurance policy will include a hurricane deductible. Likewise, states more prone to wind-related events – that is, tornadoes – are more likely to cut off the wind.
Anyway, these amounts generally vary from around 1% to 5% (with a minimum of $ 500) depending on the specifics of your insurance contract. Some are as high as 15%, Holdin said.
More from Personal Finance:
Tips to help unemployed parents brush up on their professional skills
Tenants are still protected from eviction in these states
The pandemic increases the search for remote jobs by 460%
It’s important to note that for these percentage-based deductibles, the amount is based on your sum insured, not the damage it caused.
For example, if your home is insured for $ 500,000 and you have a 5% hurricane deductible, you would be responsible for covering the first $ 25,000 of damage. This means that it is wise to have a plan to cover your share after a disaster.
Standard policies will generally cover the repair or replacement of your home up to the amount for which it is insured. Alternatively, you may have a clause that increases this replacement amount to 125% or 150% of your housing coverage or the policy may not have a cap on the replacement cost.
When evaluating the replacement cost provision of your policy, be sure to factor in the high costs of renovating your home, especially if it’s been a while since you’ve purchased insurance.
Keep your important files safe
Long before disaster strikes, key documents, such as birth certificates, deeds, titles, and tax returns, should be stored securely in a waterproof location, and duplicates should be kept elsewhere with someone you trust at the IRS. give advice. Or, you can scan them and store them online or on a flash drive.
Additionally, if your home is damaged, it is advisable to take photos of the contents and condition of your home to aid in the insurance claim process. The idea is to have proof of what you have, as well as a record of what everything looked like before the storm.
Even if you don’t own your home, your finances are at risk if a hurricane damages the home or the building you live in. While homeowner’s insurance will cover the structure itself, you will be responsible for your property.
Tenant insurance is an option to cover your belongings. It can also cover the cost of living elsewhere if you cannot live in your home after a hurricane or other insured event.
According to NerdWallet, the national average for a policy with $ 30,000 coverage for personal property, a $ 500 deductible, and $ 100,000 liability protection is $ 168 per year (about $ 14 per month).