Things to Know About Hurricane Season Homeowners Insurance – Nasdaq | Vette Leader

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Those who live in coastal areas are likely aware of all the precautions to take during hurricane season, but one that often gets overlooked is checking homeowners insurance coverage. Anyone who forgets this could experience a nasty surprise in the event of damage. Here are five important things all homeowners in hurricane-prone areas need to know about their coverage.

1. Home insurers can impose a moratorium on new policies

Waiting until the last minute to get home insurance could leave a homeowner with no insurance coverage at all. Many homeowners insurance providers place a moratorium on new policies in hurricane path areas when the storm is near. Each company sets its own rules, but many do not write a policy within 24 to 48 hours after a hurricane makes landfall, and some continue this moratorium for several days afterward.

Homeowners are better off looking for a policy well in advance of a storm. This also gives them extra time to compare prices and find the best deal.

2. Insurers only pay up to the policy limit

This may seem a bit simple, but it’s important to remember, especially if it’s been a while since the homeowner checked their policy’s coverage. If construction costs have increased in the area, it could cost more to build the home from the ground up than the current policy limit. But that’s the homeowner’s problem, not the insurer’s.

It’s a good idea for everyone to review their homeowners’ insurance coverage each year and make sure the limits are high enough to pay for a full rebuild if needed. Homeowners who find their limits too low should contact their insurer to raise them.

3. Homeowners insurance policies may have a separate hurricane/storm deductible

All home insurance policies include deductibles. These are the expenses that the homeowner must pay before the insurance company pays anything for the claim. Usually this is a standard dollar amount that the homeowner agrees to when purchasing the policy. But more and more insurers are requiring homeowners to have a separate — and higher — deductible for hurricane or storm damage.

These hurricane deductibles are often set as a percentage of the policy limit. For example, a 1% deductible on a $200,000 home insurance policy is $2,000. Homeowners who are unsure of what to pay for a hurricane deductible should contact their home insurer to inquire. Then they should try to set aside at least that much in their emergency fund so that they have the money ready in the event of a claim.

4. Home insurance doesn’t cover everything

Most homeowners insurance policies cover hurricanes and the wind damage they cause, but they don’t cover flood damage even if it occurs because of a hurricane. Anyone who does not want to pay for expensive flood repairs out of their own pocket must invest in separate flood insurance. Mortgage lenders often require this for homeowners living in flood-prone areas.

Sewage backups are another thing not usually covered by standard homeowners insurance. This can also happen during hurricanes as a result of flooding and other storm damage. Many insurance companies allow homeowners to add an addendum to their policy that includes this protection if they choose to do so.

5. Certain precautions can earn homeowners a discount

Some home insurance policies offer discounts to homeowners who take steps to protect their home from hurricane damage. One of the most common examples of this is storm flap discounts. These shutters reduce the risk of storm damage to windows and can therefore reduce the cost of a hurricane insurance claim.

Homeowners interested in getting a home insurance discount for the actions they take should contact their insurer to inquire if this is an option. If not, they should shop around and compare rates with other leading homeowners insurance companies to see if they can find a better deal.

No one wants to make a hurricane insurance claim — and no one wants to deal with a hurricane at all. But these things happen, so homeowners have to be ready. Incorporating an insurance check into annual hurricane season preparations can give a homeowner peace of mind and one less thing to worry about if the worst happens.

The Ascent’s picks for the best homeowners insurance companies

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