Can You Purchase Hurricane Insurance?
In the U.S., 53 percent of the population reside within 50 miles of the coast, according to the Institute for Business and Home Safety. Despite the high risk for hurricane damage, or perhaps because of it, many homeowner insurance policies exclude hurricanes from the list of automatically covered perils. But hurricane deductibles are available in some states for a premium.
Other People Are Reading
-
America's Most Expensive Hurricane
-
The cost of hurricane deductibles on homeowner insurance policies is through the roof, so to speak. The significant rise in premiums can be blamed on Hurricane Katrina, America's most expensive hurricane. Katrina caused more than $40 billion in homeowners insurance claims, which led to elevated homeowners insurance rates for coastal dwellers.
Wind-Only Related Coverage
-
Many homeowners insurance policies cover wind-related damage from tornadoes, wind storms, hail or lightning. If you live in a hurricane-prone area, check your policy's fine print for hurricane exclusions. Many insurers exclude hurricanes, but it's worth checking before you buy additional coverage.
-
Flood Protection
-
Flood damage, whether hurricane-related or otherwise, is explicitly excluded from homeowners insurance policies. If you live near a coastline, however, flood insurance is available from the National Flood Insurance Program, or NFIP. Flood insurance will kick in to repair any flood-related problems after a hurricane but will not cover wind damage. For a link to NFIP's FloodSmart website, which can help you find out whether you qualify, see Resources.
Hurricane Wind Coverage
-
In 18 coastal states and the District of Columbia, windstorm deductibles must be offered as part of every homeowners insurance policy. These states are Alabama, Connecticut, Delaware, Florida, Georgia, Hawaii, Louisiana, Maine, Maryland, Massachusetts, Mississippi, New Jersey, New York, North Carolina, Rhode Island, South Carolina, Texas and Virginia. Windstorm deductibles are available as hurricane deductibles or windstorm-only deductibles. Choose the hurricane option if you live in a coastal region.
Calculating Hurricane Deductible
-
In the 18 states that offer homeowners insurance policy hurricane coverage, the deductible is based on a percentage of the home's value, unlike standard coverage, which uses a pre-set dollar amount. Most policies require a deductible that ranges from 1 to 5 percent of the home's worth, although this percentage may be higher in high-risk areas. In fact, some parts of the country make hurricane deductibles mandatory, so it's important to check with your state's insurance department before buying a new policy. For a link to each insurance commission website by state, see Resources.
-
References
Resources
- Photo Credit Ablestock.com/AbleStock.com/Getty Images
