Checklist for Hurricane Season Insurance

Do you have a checklist for checking your insurance coverage? You likely create checklists for house maintenance, food shopping, and job assignments; however, do you have a checklist for assessing your insurance coverage? It is a good time to review your homeowner's or renter's insurance, and this list from the Insurance Information Institute will make it simple to ensure that you are well-prepared in the event of a hurricane.

Homeowners Protection

Check your policy's limit to see if it's sufficient to rebuild your home.

Ensure you have sufficient coverage to reconstruct your home in its entirety if it is significantly damaged or destroyed. Also, remember that the real estate worth of a house is not the same as the cost of rebuilding.

Consider the following homeowner coverages to safeguard against the costs of hurricane-related reconstruction:

• Extended Replacement Cost Policy - pays 20 percent or more above the policy limits.
• Guaranteed Replacement Cost Policy - covers the total amount necessary to replace your home, regardless of how much it ultimately costs.
• Inflation Guard - automatically adjusts coverage limits to account for fluctuating construction prices.
• Ordinance or Law Coverage - covers a certain sum for rebuilding following new building rules if your municipality adopts tighter codes.

Do you know the value of all of your possessions?

Imagine buying your furniture, clothing, and other personal belongings again. Now consider how much that would cost. Most insurers provide coverage for personal belongings ranging from 50 to 70 percent of the amount of insurance on your home's structure. Is this adequate? The easiest approach to assess what you require is a home inventory, which consists of a comprehensive list of your possessions and their estimated value.

Verify the type of insurance you have for your possessions:

• Replacement Cost Coverage - covers the amount necessary to replace your personal property at its current market worth.
• ACV Coverage - pays to replace your personal belongings only at their depreciated worth.

Does your policy provide adequate coverage for Additional Living Expenses?

Additional Living Expenses (ALE) coverage is triggered if your house becomes uninhabitable due to a hurricane or other covered event. ALE covers the additional costs associated with living away from home, such as hotel bills, restaurant meals, and other out-of-pocket expenses. In contrast, your home is being restored or rebuilt. If you rent out a portion of your home, you will also be compensated for missed rental income.

Verify that the coverage meets your requirements:

In general, ALE coverage is equal to 20 percent of your insurance coverage on your home's structure; however, most insurers give the option of larger coverage limits.

Many policies give ALE reimbursements for a limited period; ensure you are comfortable with your policy's time limits.

What is the proportion of your policy's hurricane/windstorm deductible?

In every coastal state from Maine to Texas, insurers include hurricane and/or windstorm deductibles in homeowner policies. In contrast to the normal "dollar deductible" on an auto or homeowner's policy, hurricane and windstorm deductibles are typically indicated as a percentage. It is stated plainly on the Declarations (front) page of your homeowner's insurance policy.

In general, hurricane and windstorm deductibles run from 1 to 5 percent of the insured value of your home's structure. A hurricane deductible applies exclusively to hurricanes, while a windstorm deductible applies to all types of wind. If your policy has a hurricane deductible, the policy will specify the specific "trigger" that activates the deductible.

What natural calamities does your policy cover?

Standard homeowner's insurance policies give coverage for hurricanes, wind, theft, fire, explosion, lightning strikes, and various other natural calamities. However, every policy has a list of exclusions, such as flood and earthquake, which are NOT covered. Be familiar with the exclusions in your policy, and either speak with your insurance agent about getting more coverage or be prepared to pay for the damages out of cash.

Consider the following extra coverages in hurricane-prone regions:

Coverage for sewer backup is available as a separate policy or as an endorsement to an existing homeowner's insurance policy. Standard homeowner's insurance and flood insurance do not cover sewer backups and damage from runoff water resulting from heavy rain.

Flood Insurance - FEMA's National Flood Insurance Program (NFIP) and certain private insurers offer separate flood insurance.

What about your flood insurance policy, though?

People tend to underestimate the risk of flooding, although 90 percent of all-natural disasters—especially hurricanes—involve some sort of flooding. You must get a separate flood insurance policy if you reside in a flood zone or a hurricane-prone area. However, it is as essential to comprehend what it covers.

An NFIP flood insurance policy offers up to $250,000 in replacement cost coverage for the home's structure and up to $100,000 in actual cash value coverage for personal property. Make sure you understand what qualifies as a basement and what is and is not covered in this part of the house. The NFIP policy excludes coverage for ALE as well.

Additional flood insurance advice:

• There is a 30-day waiting period before a flood insurance policy goes into effect, so don't apply for coverage while a storm is imminent.
• The NFIP offers a variety of deductibles; the deductible you select will affect the cost of your coverage and the amount of money you will get if you file a claim.
• If you want a higher level of coverage than the NFIP provides, you may want to explore purchasing excess flood insurance from a private insurer.

Renters' Coverage

Have you purchased renters insurance if you rent rather than own your home?

While your landlord may provide insurance coverage for your home's construction, you are liable for your possessions as a renter. Renters insurance covers the loss or destruction of your belongings if they are damaged by a hurricane or another peril covered by the policy. A normal renters insurance policy offers ALE coverage if you are displaced from your home or apartment due to hurricane damage.

Flood insurance is accessible to renters as well. NFIP flood insurance policies for renters, like those for homeowners, do not include ALE coverage.