By the time hurricane season arrives, homeowners in areas that frequently experience megastorms have probably long ensured that their insurance is in order. But as the devastation from Harvey, the first hurricane in nine years to make landfall in Texas, illustrates, those who live in areas less prone to hurricanes should also check their coverage in case a once-in-a-decade weather event should hit their area.
There’s no such thing as "Hurricane Insurance", per se. Instead, coverage comprises a combination of policies, beginning with your regular homeowners insurance. With a myriad of conditions and exceptions at work in and between these policies, these steps are meant only as an overview to prepare you for a conversation with your insurance agent, which we highly recommend.
Check Your Home Insurance: It May Cover You Against Wind—Albeit With a Higher Deductible
In many states, your standard home policy will cover your home against damage from one of a hurricane’s most devastating hazards--heavy winds. Even a category 1 hurricane brings sustained winds of at least 74 mph; at Category 3, those winds will steadily exceed 111 mph. If those blasts tear off your siding and shingles, and cause other damage to your home and property, your policy should reimburse you for those damages.
However, don’t assume the regular deductible on your policy will apply. There are 19 states (see the list in the windstorm section below) in which, for certain high risk areas, you’re responsible for a higher “hurricane deductible,” which is typically 2% to 5% of the value to which your home is insured. For example, if your home is insured for $500,000, then you could be on the hook for the first $15,000 to $25,000 in damages.
The deductible kicks only for a named hurricane, and sometimes when other conditions apply as well, such as the storm reaching land. You will need to figure it out with your insurance company after the fact to determine whether you would need to pay for the hurricane deductible. You should just be wary that you may need to pay several thousands of dollars out of pocket for your home to be repaired after a hurricane. We would recommend if your home is insured for a high value and are worried about a hurricane, you keep the funds for the deductible readily available.
Know If You Also Need A Windstorm Policy: Some States Require These
In some states, however, including Louisiana, Texas and Florida, some companies may require you to buy extra windstorm insurance to cover against any or all wind damage. This additional coverage will cover you for all damage to your home from high-speed winds, including those from hurricanes, tornadoes, cyclones and tropical storms.
In the following states, a separate windstorm policy is required to protect against wind damage. Here's the list of such states; these are also the states in which higher hurricane deductibles will apply for damage to named hurricanes:
- New Jersey
- New York
- North Carolina
- Rhode Island
- South Carolina
Consider Flood Insurance: It’s Needed to Cover Water Damage
When it comes to your regular homeowners insurance covering water damage, it’s all about whether the water touched the ground before it entered your home. If it didn’t—say it leaked through your roof from torrential rains—your regular policy should cover the damage. If the water did touch the ground, the deluge is officially a flood for insurance purposes, and you’ll require a flood policy in order to be covered for any damage it causes.
Insurance against flooding may be required should you live in a particularly risky area and you don’t own your home outright. If those conditions do not apply, the easiest way to determine whether you're in danger of flood is by looking at your community's flood map. There are several thousand communities across the country that participate in FEMA's flood mapping program, and if you are even wondering if you are in a flood zone, your community likely has a map.
These maps are broken down into several "risk" categories. If you live in a zone designated as "X" or "A,” your home is at the highest risk for flooding, and flood insurance is highly recommended. If you are in a "B","C", or "X" zone, the likelihood of a flood is lower than in an area zoned X or A. Lower but not negligible; about 25% of all flood insurance claims come from these zones. A flood insurance policy is well worth considering if you live in such an area. The cost of insurance coverage that’s above and beyond your regular homeowners policy isn’t insubstantial. The average cost of homeowners insuranceis about $964 per year, according to ValuePenguin’s research, and windstorm coverage can add several hundred dollars to that tab.
Meanwhile, the average cost of flood insurance is $672 per year. As those figures reflect, the cost of insuring your home against hurricane damage, along with all the regular perils, can easily double your insurance premium—from around $1,000 to about $2,000, using our typical figures. Yet the financial impact of a hurricane is equally high. For example, flood damage is particularly costly—just one inch of flood water can cause on average of $10,000 worth in damage, and the average flood insurance claim totals about $30,000.