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As the spring heat takes hold, homeowners may want to make sure they are prepared for the bad weather that is likely to follow soon.
This preparation should include checking the insurance coverage.
Whether you live in an area prone to hurricanes, tornadoes, floods, hail, fires, or severe storms – all of which are becoming increasingly prevalent in a hot climate, it’s important to know what types of climate-related damage your insurance covers. of homeowners, excludes or charges a separate (and possibly higher) deductible.
“Take some time to understand how politics works [covers] adverse weather conditions and natural disasters, ”said Steve Wilson, senior underwriting manager at insurer Hippo.
Tornado season is already underway and Atlantic hurricane season starts June 1st and runs through November 30th. Meanwhile, much of the western United States is experiencing drought conditions, which are conducive to fires.
Depending on where you live and the weather typical of that area, your policy may provide coverage for some of the more location-specific events, and state law often dictates what is required by policies offered in their jurisdiction.
It is worth noting that in Florida, the insurance industry is in crisis, largely due to rampant roof replacement programs that result in litigation and have cost insurers approximately $ 3.4 billion in underwriting losses in the past. two years, according to Mark Friedlander, a spokesman for the Insurance Information Institute.
Florida homeowners in 2021 saw their premiums rise by an average of 25%, compared to 4% for the rest of the United States, Friedlander said. The institute expects average increases of 30% to 40% this year, with many families seeing increases of 100% or more.
Regardless of where you live, here’s what you should review on your weather coverage.
While many weather events are covered under the standard part of your policy, some fall into a different section that comes with a separate deductible.
If you live in a state along the east coast or the Gulf of Mexico, there’s a good chance your policy has a hurricane deductible. Likewise, in states more prone to wind-related events, such as tornadoes, you are likely to have a wind allowance.
In any case, those amounts typically range from around 1% to 5% (with as little as $ 500) depending on the specifics of your insurance. Some homeowners may opt for an even higher deductible if available.
Take some time to understand how the policy works [covers] bad weather and natural disasters.
Senior underwriting manager at Hippo
Keep in mind that for those percentage-based deductibles, the amount is based on the insured value, not the damage caused.
So, 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 regardless of the total cost of the damage.
Additionally, earthquakes are not covered by standard homeowner policies, even in earthquake-prone California (you should purchase separate insurance). Nor, typically, are they other types of earthmoving (eg landslides, sinkholes).
Floods have become an increasing risk for homeowners as sea levels rise and storms intensify. Yet only 15% of homeowners are insured for flood damage protection.
“One of the most important hurricane protection policies to consider that can be overlooked is flood insurance,” Wilson said.
If you are in a high-risk flood zone, your mortgage lender probably requires you to have it. Yet, according to the government’s National Flood Insurance Program, 1 in 4 compensation comes from homeowners outside those areas.
You can get coverage through a private insurer or the federal program (which is how most homeowners get a policy). There are exclusions and limitations on what’s covered, however. And, outside of some exceptions, the policies take 30 days to take effect.
The average annual cost is $ 985, although this can vary widely. The Federal Emergency Management Agency recently updated flood maps to more accurately reflect the risk, which is causing premiums to rise for some homeowners and decline for others.