Hurricanes are among the most common and deadly natural disasters in the United States. According to the Insurance Information Institute, there were a record 30 named storms in the country in 2020, compared to the 12 named hurricanes in a typical year. There is no insurance policy that is specifically designed to cover damage caused by hurricanes. However, these types of damages may be covered in certain cases. Here is a close look at flood insurance and hurricanes.
How Does Flood Insurance Cover Hurricane Damages?
Flood damages resulting from hurricanes aren’t typically covered by homeowners’ insurance. What you’ll need instead for this type of coverage is a separate flood insurance policy that helps pay for storm surge and water damage caused by natural disasters.
Flood insurance is issued through the National Flood Insurance Program (NFIP), which provides up to $250,000 in coverage for personal policies. If you wish to have coverage over that amount (including coverage for hurricane damages), you will likely need to purchase a policy from a private insurer. Additionally, NFI policies typically don’t cover basement flooding.
When Does Home Insurance Cover Hurricanes?
For most standard homeowners’ insurance policies, coverages for personal and physical property are limited based on what caused the damages. Depending on your insurer and policy, perils may either be “named” (listed as covered under the policy) or listed as exceptions to coverage. Although hurricanes themselves normally aren’t considered excluded or covered perils, their characteristics and consequences are if you live in an area where these events are common (e.g. coastal regions). These include:
- Wind: Many homeowners’ insurance policies cover damage caused by winds, including fallen tree branches and shingles blown off your roof.
- Flooding and other water damages: In certain unique cases — such as when a hurricane’s winds cause debris to enter your home through the window and your carpets become damaged by the rain — a homeowners’ insurance policy would likely cover these damages.
- Sewer backup: This type of coverage is generally available as an optional add-on or “endorsement” to a homeowners’ insurance policy.
- Evacuation and Temporary Relocation: In most cases, homeowners’ insurance doesn’t cover relocation-related expenses. However, if your home is unlivable upon your return, your policy could likely cover hotel costs and other related payments.
It’s also important to note that homeowners insurance policies don’t normally pay for hurricane damages to vehicles. If you’re seeking homeowners’ insurance coverage, you may have the ability to choose between guaranteed replacement cost coverage, replacement value, and actual cash value (ACV), which factors in depreciation. Of these three, guaranteed replacement cost coverage normally incurs the highest costs because this pays for increases in material costs following a hurricane.
States with Hurricane Deductibles
A deductible represents the sum you have to disburse (out-of-pocket) to resolve a claim before your insurance policy kicks in. Generally speaking, a hurricane deductible is expressed as a percentage (often between 1 and 5%) of the amount your home is insured for.
When exactly this deductible kicks in typically varies by insurance company and state, although most insurers wait for the National Weather Service to officially label a storm as a hurricane. The NWS will often name a hurricane and/or define it as a Category 3 or 4 storm. Currently, hurricane deductibles are required in 19 states and the District of Columbia. These states are:
- New Jersey
- New York
- North Carolina
- Rhode Island
- South Carolina
Be sure to know what is considered a “hurricane” in your state before choosing an insurance policy. You can also check to see if insurance companies in your area offer special discounts for homeowners who take active steps to protect their home from storms.
Get Flood Insurance From JMG
Reach out to the experts at JMG Insurance Agency for more information on flood insurance coverages. Since 1916, we have been dedicated to serving the insurance needs of clients throughout Connecticut, New Jersey, New York, Hawaii, and Massachusetts. As an independent agency, we work closely with several reputable insurance carriers to provide our clients with high-quality solutions.
At JMG, we understand that just one inch of water damage due to flooding can be extremely costly to repair. Therefore, we strive to provide comprehensive personal flood insurance policies that cover both damage to your dwelling (foundation, plumbing and electrical systems, etc.) and its contents (furniture, clothing, electronics, etc.).
Call JMG today at (844) 304-7332 or visit us online to learn more about our flood insurance policies.