Is Your Insurance Ready to Face the Wrath of Mother Nature?

 By Catherine Powell

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Everywhere you look these days it seems you can't help but find stories of natural disasters.  Record flooding in Kentucky, tornadoes tearing up the heartland, and western wildfires of epic proportions are featured every day on the news.  So frequent are reports of mayhem brought about by Mother Nature that a lot of folks simply tune them out.  At least they do until they're staring down the barrel of a natural disaster of their own.  Then it's a matter of wondering whether they're prepared for the worst that Mother Nature can dish out.  Living in Florida means that all of the above mentioned calamities have occurred in the past and will occur again in the future.  The last thing you want to find out after a natural disaster has damaged or destroyed your home is that your insurance isn't going to help make you whole again.  Below are ten tips to help you make sure this never happens to you.

1. What's kind of natural disaster is covered under a standard homeowner's policy? - The list of covered perils includes such things as lightning strikes, tornado damage, wildfires, wind and hail damage.

2. What's not covered under a standard homeowner's policy? - The list of exclusions includes earthquake damage, landslides, sinkholes, sewer backups, damage caused by storm surges, and flood damage.  If you wish these omissions to be covered, you'll need to ask your agent to add endorsements for earthquakes, landslides, storm surges, sinkholes, and/or sewer backups.  As for flooding, your agent should be able to help you secure coverage through the National Flood Insurance Program.

3. Do you have to be in a flood zone to need flood insurance? - Absolutely not.  In fact, many of those whose homes were swept away by flood waters in Kentucky weren't in a flood zone.  The same thing held true when Hurricane Harvey inundated the Houston area in 2017.  In the case of Harvey, more than 39,000 people were forced out of their homes by floodwaters.  Those in Kentucky and Houston who had no flood insurance and whose homes were damaged or destroyed by floodwaters were forced to pick up the pieces on their own since their homeowner's policies did not cover any of the damage caused by either of these natural disasters. in low lying areas like Florida, don't assume floodwaters can't reach your home.

4. Even if you are covered, is your coverage sufficient to deal with the disaster? - That depends on the stipulations and limits included in your policy. If your home is destroyed by a natural disaster, what's the maximum your insurer will pay to have your home rebuilt.  If your policy has a $500,000 dwelling limit and it turns out the cost to rebuild your home is going to be $750,000, do you have sufficient savings to cover the difference?  You won't need to rethink your rebuilding plans if the terms in your policy stipulate replacement cost coverage.  

5. Who covers the costs if your family is forced to move out of your home due to damage caused by a natural disaster? - Most homeowner's policies will reimburse you for living expenses should you be forced to leave your home after a disaster should your home be uninhabitable.  Just make sure you understand the limits and rules that pertain to this portion of your coverage.

6. Can you use an umbrella policy to overcome any gaps in coverage? - No. An umbrella policy is only used to cover liability or property damage you cause to others.  It won't apply to damage done to your property.  If you're concerned about the limits in your current policy, the best thing to do is to call your agent to discuss the matter.  Limits can be raised to cover the real world costs that a natural disaster can cause.

7. Is everything on your property covered by your homeowner's policy? - That depends on the type of policy you purchased.  There are eight levels of coverage offered by homeowner's policies.  The most basic type of policy (HO-1) covers your residence and attached structures including appliances, but it doesn't cover personal belongings or additional living expenses.  HO-2 policies cover personal belongings and even throw in additional named perils such as coverage for damage caused by frozen pipes.  HO-3 policies add  additional liability & living expenses, as well as some medical payments. HO-5 coverage includes higher limits and fewer exclusions than lower level coverage.  The bottom line is you should speak to your agent if you have any questions about coverage, limits, and exclusions on your policy before you discover that the coverage you have doesn't meet your needs.

8. Are you familiar with your deductibles? - You'd better be since you'll need to pay these before the insurance company will help settle a claim.  While the arithmetic is fairly simple for a standard deductible of say $1,000, it can get significantly more complicated and expensive when it comes to storm related claims, some of which come with a separate deductible that's based on your home's insured value.  That means if wind, hail, or a hurricane damages your home, you could be expected to pay from 1%-10% of your home's insured value.  That means if your home is valued at $500,000 and the hurricane deductible is 2%, you would be expected to pay the first $10,000 of any claim for damages sustained during a hurricane.  Flood insurance also comes with a deductible of $1,000-$10,000. 

9. What do you need to do if your home is damaged by a natural disaster? - When the storm or fire has passed and you return to find your property damaged or destroyed, you need to document the damage and file a claim as soon as possible.  Make sure you keep track of expenses and only make temporary repairs designed to limit any collateral damage while you await the arrival of the insurance adjuster.  

10. What can you do to help mitigate the damage? - While you can't always evade a natural disaster, there are ways to reduce the damage caused by one.  Removing brush and shrubs from around your home can reduce the chances of a brush fire setting your house ablaze.  Moving expensive electronics to the second story or the attic can sometimes prevent them from being destroyed by rising water.  Securing or storing items kept in your yard can help reduce wind damage.  

Catherine Powell is the owner of A Plus All Florida Insurance in Orange Park, Florida. To find out more about saving money on all your insurance needs, check out her website at http://aplusallfloridainsuranceinc.com