Understanding Hurricane Insurance (Wind & Flood Damage Coverage)

Large Hurricane Storm System Photo from Space

Hurricane season is upon us, and already we’ve seen massive storms cause damage along the coastlines. For homeowners, the joys of living near the beach or the convenience of a nearby ocean are suddenly overshadowed by the risk of major loss, and their attention is turned to their insurance, or lack of it, during these tragic times. Many homeowners don’t fully understand their coverage, and they face sudden stark truths when attempting to file a claim. Insurance to cover the damage inflicted by a hurricane is rather complicated, and it is actually a bundle of several components.

Wind Damage

Normal storm wind damage is included in most homeowners policies. However, if the damage is declared to be directly from a hurricane, many policies implement a different formula to calculate the amount of the deduction. In many cases, this can be quite large, and the policyholder should be aware of the difference and be prepared to pay the additional amount to receive their claim. A few states instead require a separate policy for hurricane wind damage for those in high-risk storm areas. It’s important that a homeowner review their policies with the agent to ensure that they are properly covered against all elements of a catastrophic storm event.

Flood Damage

Damage due to flooding is rarely included with a standard homeowners policy and must be purchased separately. Since hurricane claims almost always include the extensive damage caused by floodwaters, it is highly recommended that those who live in a storm risk area maintain flood insurance at all times. Many loan organizations require it for homes in high-risk areas, where the chances of an incident are elevated. Many insurance companies do not offer new policies after the storm season has begun or the storm has been named, so it’s important to plan ahead and keep coverage intact.

Other Options

If an uninsured or underinsured homeowner suffers damage from a hurricane and the region is then declared a federal disaster area, federal aid may be available for emergency use. The aid, if the homeowner qualifies, can be used to provide a place to stay during recovery, the purchase of clothing or other essential items needed, or to implement repairs to the damaged home. Federal aid is not guaranteed, however, and a homeowner should obtain proper insurance for their region and stay prepared against any natural disaster that they might face in the future.