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Hurricanes and cyclones have caused the most destruction of all natural disasters in the United States. In the last five years alone, the total cost of these storms was estimated at $742.1 billion, according to the National Oceanic and Atmospheric Administration (NOAA). So how can you protect yourself from a devastating financial loss after a hurricane?

While there isn’t a specific hurricane insurance policy you can buy, you can create a comprehensive insurance coverage package that protects against wind and flood damage to your home. You’ll also be able to tailor it to suit your financial situation by choosing deductible amounts you can afford.

Here’s what you need to know about hurricane insurance:

What is hurricane insurance?

Unlike natural disasters like earthquakes that do have a specific policy, there’s no one policy for hurricane insurance. If you live in an area prone to hurricanes, you’ll want to get extra protection against the type of damage hurricanes cause: wind and flood damage.

Flood insurance

A regular homeowners insurance policy doesn’t cover water damage from flooding. You’ll want a flood insurance policy to cover the rising waters and storm surge that come during hurricane season.

You may be able to get flood insurance added to your existing homeowners insurance policy through a rider, or you may purchase a separate policy. Be aware that flood insurance policies typically have a waiting period before they go into effect, so it’s best to get this policy long before hurricane season starts.

If you live in a high-risk area, you may not be able to get flood insurance through your existing insurance carrier, but you can get it through the National Flood Insurance Program. You can check the risk for your home’s location using FEMA’s Flood Map Service Center.

Good to know: Chances are, if you live in a high-risk area, your mortgage lender already requires you to carry flood insurance. If that’s the case, you’ll still want to check your coverage limits and deductibles to make sure your policy is sufficient for your situation.

Keep in mind that even flood insurance may not cover hurricane-related water issues like mold, leaky roofs, and water backups. Check with a licensed insurance agent familiar with hurricane risks and damage to see what coverages you may need to add.

Windstorm insurance

Wind damage is treated differently by insurers in coastal areas. Windstorm insurance may be part of your existing policy already with a separate deductible. If it isn’t, you can add coverage through a rider or a separate policy with another insurance carrier.

Loss of use coverage

While loss of use coverage is important for every homeowner, and it’s included in most standard home insurance policies, it’s vital if you’re in a high-risk area and want to be covered after a hurricane.

After a natural disaster, loss of use coverage can help you pay for temporary accommodation and other additional living expenses if your home becomes uninhabitable.

Keep in mind: Coastal areas typically have high housing costs even in the best of times, and hurricane damage usually affects large areas. This means you may need to travel farther and pay more to find available lodging and you may have to compete with other people who’ve also been displaced by the storm.

Similarly, depending on the severity of the storm, it may take significantly longer to rebuild your home if your entire area needs to be rebuilt simultaneously. These are just a couple reasons why loss of use coverage is so important to have.

When determining your amount of loss of use coverage, consider the worst-case scenario. Make sure you have enough to pay for increased housing costs for the length of time it would take for floodwaters to recede and for your entire neighborhood to be rebuilt in the event of a major hurricane.

Replacement cost coverage

If you live in a desirable area with a hot housing market, it’s important to review your homeowners policy regularly to make sure you have enough replacement cost coverage. Replacement cost will cover the cost of rebuilding your home, not the market value of your home.

Replacement cost reimburses you so you can replace your home or belongings, without factoring in depreciation. Actual cash value coverage, on the other hand, reimburses you for the current cost of your home or personal property, subtracting depreciation.

Example: If you have a five-year-old couch, your homeowners insurance may say its actual cash value is worth 50% less because of its age. If your couch is damaged by flooding from a hurricane, you may not be able to replace it with a check worth half the value of a new couch.

When you consider the age of every belonging in your home, the actual cash value payment from your insurance carrier may not be enough to replace most of your things. Replacement cost coverage would provide you with enough money to replace your belongings with new ones of similar value.

Getting replacement cost coverage can be extremely important in an area prone to hurricanes where construction costs can be high. You want to make sure that you have enough insurance to replace your home and belongings after a disaster.

Does regular homeowners insurance cover hurricane damage?

A regular homeowners insurance policy won’t cover flooding, which is one of the main types of damage from a hurricane.

However, in most states, wind damage is covered by your homeowners insurance policy. Be sure to check your insurance paperwork, though, since high-risk coastal states may not include coverage for wind damage, and you might need a rider or separate policy.

Every state that touches the Atlantic Ocean is considered high-risk for hurricanes, including:

  • Alabama
  • Connecticut
  • Delaware
  • Florida
  • Georgia
  • Louisiana
  • Maine
  • Maryland
  • Massachusetts
  • Mississippi
  • New Hampshire
  • New Jersey
  • New York
  • North Carolina
  • Rhode Island
  • South Carolina
  • Texas
  • Virginia

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Hurricane deductibles

A deductible is the dollar amount or percentage that you must pay to cover a type of damage before your insurance will kick in. Insurers in high-risk areas may have separate deductibles for windstorm damage, named storm damage, and hurricanes.

  • Windstorm deductible: This deductible applies to damage caused by wind and hail. Any storm with strong winds that causes damage, including tornadoes, will require this deductible.
  • Named storm deductible: Once the National Weather Service names a storm, your named storm deductible will go toward any damage from that storm.
  • Hurricane deductible: A hurricane deductible applies once a storm has been officially categorized as a hurricane. The National Hurricane Center, operated by NOAA, has specific metrics a storm must meet to be classified as a hurricane. For example, it must have sustained winds of 74 miles per hour or more.

While typical home insurance deductibles are a flat dollar amount, windstorm, named storm, and hurricane deductibles are typically a percentage of the insured value of your home. Typically this percentage is one to five percent, but can be higher in the most high-risk areas.

It’s important that you know what your deductibles are and that you have that amount saved or readily available to you after a storm.

If, for example, your home is worth $500,000 and your wind deductible is 5%, you would need to have $25,000 available to replace your roof if a major storm damages it. Your insurance will kick in after you’ve paid your deductible of $25,000.

Additional tips for buying insurance

Buying coverage for a hurricane requires a little bit more research and legwork than buying a policy in an area without hurricanes. Shop around for the best policy and make sure you speak with a licensed insurance agent in your area who’s familiar with the types of damage hurricanes can cause. The best time to shop for hurricane insurance is as soon as possible.

Once a hurricane has been named, it’s far too late to get coverage for that storm because of insurance carriers’ waiting periods. Once you do choose a policy, make sure you have enough saved for the deductibles and the coverage is adequate for your needs, should you ever have to file a claim. Ask your agent to explain anything you’re unsure of and to clarify any waiting periods for specific coverages.

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About the author
Rae Hartley Beck
Rae Hartley Beck

Rae Hartley Beck is a Credible authority on personal finance. Her work has been featured in Bankrate, MoneyWise, and Investopedia.

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