The 2019 hurricane season is underway and the experts predict that there will be up to 13 named storms, five hurricanes, and two major hurricanes. While this is “slightly below” the average season, there is no guarantee that this prediction is accurate or that the damage won’t be devastating.

Most Florida residents believe that their homeowners insurance and other policies provide the protection they need, but after Hurricane Michael, many learned that they didn’t have enough coverage. To avoid this financial devastation, take these steps:

Check Insurance Policy Limits

The first thing to do is determine whether you have enough coverage to completely rebuild your home after a hurricane. When assessing this issue, remember that the cost to rebuild is likely to be more than the real estate value of the home. If you believe that your current coverage won’t be enough, consider these additions:

• Extended Replacement Cost Policy. This pays an additional 20% or more above the policy limits.
• A Guaranteed Replacement Cost Policy pays the full amount to rebuild your home whatever the ultimate cost.
• Inflation Guard automatically adjusts the coverage limits to reflect changes in construction costs.
• Ordinance or Law Coverage will pay a specified amount for rebuilding to new building codes, should your community adopt stricter codes. 

Review the Hurricane/Windstorm Damage Deductibles

Most Florida homeowners policies include a hurricane or windstorm deductible. Unlike the standard “dollar deductible” on auto and home policies, a hurricane or windstorm deductible is usually a percentage, such as 1 to 5%, of the insured value of the structure of your home.

There is an important difference between a hurricane deductible and windstorm deductible. A hurricane deductible will only be triggered if the property damage occurred as a direct result of a hurricane. However, a windstorm deductible applies to any type of wind damage, including tropical storms. If you have a hurricane policy, you will not have the protection for other wind events that are likely to occur during the hurricane season.

Consider Flood Insurance and Sewer Back-up Coverage

Even if you have hurricane insurance, it probably does not address the flood damage to your home or property that is likely to occur because of the storm. Since most people believe that their hurricane insurance includes flood damage, they are underinsured. To truly protect your home in the event of a hurricane, you must carry a separate flood insurance policy.

Even if you believe you are outside of the “flood zone” you should consider purchasing flood insurance. The flood zone data is out of date, which many homeowners learned only after their home flooded as a result of a hurricane or tropical storm. It is better to be prepared.

In addition to flood insurance, you might consider purchasing sewer back-up coverage, either as a separate policy or as a rider on your current homeowners policy. This type of damage can occur if the sewer system is damaged or overwhelmed by major downpours or flooding and it is not covered by standard homeowners policies or hurricane insurance.

Review Additional Living Expenses Coverage

After a hurricane or tropical storm, many houses are so damaged as to become uninhabitable. At this point, the Additional Living Expenses (ALE) coverage of your homeowners policy is triggered, but will it be enough?  ALE covers the extra costs involved in living away from home, including hotel bills, restaurant meals and other expenses that are incurred while your home is being repaired or rebuilt.

While certain levels of ALE coverage are standard in most homeowners policies, review the limits to determine if you think it is adequate for your needs.

• Typically, ALE coverage is equal to 20% of the amount of insurance coverage that you have on the structure of your house but most insurers offer higher coverage limits options.
• ALE reimbursement is often for a specific period of time and you should decide if you are comfortable with this limit or want to purchase an extension option.

Know your Worth

Every homeowner should have a home inventory that details the list of the belongings and their estimated value. This includes furniture, clothes, appliances, electronics, artwork, jewelry and more. You will need this information if you need to file a claim because most homeowners policies include coverage for personal possessions.

Take the time to review the type of personal property insurance you have and decide if it is the right one for you. These insurance types are:

• Replacement Cost Coverage, which pays what it would cost to replace your personal possessions at their current value.
• Actual Cash Value Coverage, which pays to replace your personal possessions only at their depreciated value.

Conclusion

With hurricane season already upon us, now is the time to review your policies and determine if you have the right type and amount of coverage to meet your needs. If this seems like a daunting task, let us help. At Alliance, our employees live and work in Florida too, so we understand your needs. We also represent the best insurance carriers in the state and can help you find the right coverage for a price that will fit your budget.