What to know about home insurance during hurricane season

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You don’t want to discover these things when it’s too late.


Key points

  • Homeowners in coastal areas should incorporate a review of home insurance into their annual preparations for hurricane season.
  • It is important to read the fine print of a home insurance policy to avoid any surprises at the time of the claim.

Those who live in coastal areas probably know all the precautions they need to take during hurricane season, but one that often gets overlooked is reviewing homeowners insurance coverage. Those who forget to do so could be in for a nasty surprise if they have to file a claim. Here are five key things all homeowners in hurricane-prone areas should know about their coverage.

1. Home insurers can impose a moratorium on new policies

Waiting until the last minute to purchase home insurance could leave a homeowner without any coverage. Many home insurance providers place a moratorium on new policies in areas in the path of a hurricane when the storm is near. Each company sets its own rules, but many won’t write a policy within 24 to 48 hours of a hurricane’s arrival, and some maintain this moratorium for several days afterward.

Homeowners are best looking for a policy long before a storm hits. It will also give them more time to compare rates and find the best deal.

2. Insurers only pay up to the policy limit

This one might seem a little basic, but it’s worth noting, especially if it’s been a while since the owner has reviewed their policy coverage. If construction costs have increased in the area, it could cost more to rebuild the house from scratch than the current policy limit. But that’s the owner’s problem, not the insurer’s.

It’s a good idea for everyone to review their home insurance coverage every year and make sure the limits are high enough to pay for a complete rebuild, if needed. Owners who find their limits too low should contact their insurer to increase them.

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

All home insurance policies have deductibles. These are the fees the owner must pay before the insurance company pays anything for the claim. Usually this is a standard dollar amount, which the owner agrees to when purchasing the policy. But a growing number of insurers are requiring homeowners to pay a separate — and higher — deductible for damage caused by hurricanes or windstorms.

These hurricane deductibles are often priced 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 they might pay for a hurricane deductible should contact their home insurer to inquire. Then they should try to put at least that amount aside in their emergency fund so they have the money ready in case of a claim.

4. Home insurance policies don’t cover everything

Most home insurance policies cover hurricane and wind damage, but they do not cover flood damage, even if it occurs from a hurricane. Those who don’t want to pay for expensive flood repairs out of pocket should invest in a separate flood insurance policy. Mortgage lenders often require this of homeowners who live in high flood risk areas.

Another thing not usually covered by a standard home insurance policy is sewer backups. It can also happen during hurricanes as a result of flooding and other storm damage. Many insurance companies allow owners to add an endorsement to their policy that includes this protection if they wish.

5. Some precautions could earn landlords a discount

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

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

No one wants to file a hurricane insurance claim – and no one wants to deal with a hurricane at all. But these things happen, so owners need to be prepared. Incorporating an insurance review into annual hurricane season preparations can give the homeowner peace of mind and one less thing to worry about if the worst happens.

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