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How Does Hurricane Insurance Work?

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Property owners need to know what their homeowners insurance covers. For some, that means making certain they understand the rules for hurricane insurance. This guide explains what hurricane insurance is and how it works.

What is hurricane insurance?

Whether you want to protect your home or prepare your rental property for hurricanes, it's important to understand there is no such thing as hurricane insurance. Instead, homeowners need protection against the common sources of loss caused by hurricanes. This means they need windstorm protection. And they need flood insurance protection.

Standard homeowners policies exclude windstorm and flood damage. Both of these events are especially likely in hurricane prone areas. Policyholders looking for hurricane insurance coverage will need to buy a separate windstorm policy and flood insurance policy. Together, these two policies will make up their hurricane insurance protection.

Does homeowners insurance cover hurricane damage from wind?

Many homeowners insurance policies cover damage from wind. But property owners in areas with a high hurricane risk may find their home insurance excludes windstorm damage. If so, they need to buy separate windstorm protection.

Buying windstorm insurance

Windstorm insurance may be sold as an add-on to a standard home insurance policy. Property owners can add it as a rider, or they can buy separate windstorm insurance.

In areas where private insurers commonly exclude windstorm coverage, state-run insurance pools may provide coverage. One example is the Citizens Property Insurance Corporation. This is a Florida not-for-profit created by the legislature in 2002. It provides hurricane insurance in Florida for those who can't pay private insurance. It does this in the form of a wind-only policy.

Does homeowners insurance cover hurricane damage from water?

Home insurance covers some types of water damage. For example, if a pipe bursts, the resulting water damage would be covered. But policies typically exclude water damage from flooding. This is the kind of water damage a hurricane causes.

Because home insurance policies usually exclude hurricane damage from water, property owners in hurricane areas may wish to buy separate water damage insurance. This would be part of their hurricane insurance protection, along with wind damage protection.

Buying flood insurance

Flood insurance can be purchased through the National Flood Insurance Program. Homeowners also have the option to buy private flood insurance.

Flood insurance is a crucial part of protecting against hurricane-related losses. That's why homeowners who wonder, "How much is hurricane insurance?" will need to shop around and compare prices on flood insurance from multiple providers.

What is a hurricane deductible?

Many insurers have a separate hurricane insurance deductible. These could be called a "named storm." Or they may be called a windstorm deductible. A named storm deductible applies when the National Hurricane Center or National Weather Service names the storm.

A hurricane deductible usually equals a percentage of the home's value. For example, it might be 5% or 10% of the home's value. It is usually higher than the standard deductible. The standard homeowners insurance deductible for other covered disasters is often a flat dollar amount. For example, it might be $1,000 or $2,500.

Hurricane insurance cost & requirements by state

How much is hurricane insurance? And what type of insurance is required? This varies by state.

Hurricane insurance in Florida

Florida law requires property insurance companies to cover windstorm damage if it results from a named hurricane. Insurers can impose a separate deductible on hurricane insurance policies. Cost of hurricane insurance in Florida varies depending on deductible, hurricane risk, and coverage amount.

Hurricane insurance in Hawaii

Banks typically require homeowners in Hawaii to have hurricane insurance as a supplement to their standard home insurance coverage. Costs of purchasing hurricane insurance vary.

The Hawaii Hurricane Relief Fund (HHRF) was created to provide insurance. It came into existence when private companies stopped writing policies. However, standard insurers began writing policies again in 2002. So the state no longer collects money for the HHRF.

Hurricane insurance in South Carolina

South Carolina does not require hurricane insurance. However, many lenders do.

The South Carolina Wind and Hail Underwriting Association provides coverage in areas where consumers cannot obtain private coverage. Homeowners must be in an area covered by the wind pool to be eligible, and costs vary. The wind pool may not provide the cheapest insurance. So homeowners should shop around for hurricane insurance coverage.

Hurricane insurance in Texas

Texas law doesn't require hurricane insurance. However, many lenders mandate homeowners buy a policy. The Texas Windstorm Insurance Association offers windstorm insurance for those who cannot buy it privately.

Costs of a policy vary depending on which carrier a homeowner is covered by. Deductible, property value, and hurricane risk also affect costs.

Hurricane insurance in North Carolina

Although lenders often require hurricane insurance, there is no state law mandating it. Those who choose to buy a policy should research carefully to find out, "How much is hurricane insurance?" That's because costs differ based on policy, carrier, and property risk.

The North Carolina Insurance Underwriting Association offers policies to those who cannot obtain private coverage.

Hurricane insurance in Louisiana

Louisiana doesn't mandate hurricane insurance but many lenders require homeowners to buy it. Hurricane insurance can have a separate deductible. This is usually called a named storm deductible. It is higher than the standard deductible. Policy costs will vary depending on deductible, property risk, and property value.

Hurricane insurance in Mississippi

It is common for mortgage lenders to mandate property owners buy hurricane insurance. However, Mississippi law doesn't require any specific coverage. Homeowners who want to buy hurricane insurance can compare costs among private insurers. Or they can see if they qualify for a policy through the Mississippi Windstorm Underwriting Association.

Hurricane insurance in Alabama

Alabama law doesn't mandate hurricane insurance. But, most homeowners must buy a policy because their lender requires it. Policy costs can vary. Those who cannot get insurance through a private company may be able to obtain one through the Alabama Insurance Underwriting Association.

Hurricane insurance in Georgia

No Georgia law mandates homeowners purchase hurricane insurance. However, it is common for lenders to require property owners put this protection in place. Costs of a policy are determined by level of risk; deductible; and property value. Owners who cannot find private insurance may be eligible for a policy through the Georgia Underwriting Association.

How to file a water damage claim

Homeowners can file a water damage claim by following their insurance company's guidelines. In general, property owners must submit their claim within a designated period of time. And they must provide proof of covered damage.

Water damage may not be covered under a standard homeowner's insurance policy. It won't be covered if it resulted from a hurricane or flood caused by any natural disaster. Homeowners may need to file their claim with their flood insurance provider under these circumstances.

What to do if your claim is denied

If a claim is denied, homeowners should read their policy carefully. They should make sure they understand coverage exclusions.

If they believe the claim should have been covered, they should request information from their insurer about appealing a denial. Homeowners may also wish to contact their state's insurance commission to find out about legal recourse. Or they may wish to speak with an attorney.

How to lower hurricane insurance costs

Homeowners should check with their standard insurance provider and compare costs with several insurers for flood and wind protection. That's the best way to get the most affordable hurricane insurance. They should also compare offerings from standalone insurers. And they should check with their state's high-risk insurance pool if they qualify for it.

FAQs

  • If a home is destroyed by a hurricane, the property owner should see if their homeowners insurance policy will cover losses.

    Unfortunately, many policies exclude damage caused by wind and floods. These are the most likely ways a hurricane damages a property. If a homeowner's policy excludes this damage, they should have flood and wind insurance to cover their losses.

    A homeowner without flood or wind insurance may not get any help from an insurer to cover hurricane losses, though FEMA may provide some assistance rebuilding.

  • A homeowner without flood insurance will not receive help from an insurer in covering losses resulting from water damage that occurs during a hurricane. The homeowner may have to pay out of pocket to rebuild or repair their property and possessions. FEMA, however, may provide grants or other relief.

  • It is typically not possible to buy flood or wind insurance at the last minute. Most insurers will not sell policies once there is a hurricane warning or a hurricane has been declared.

  • Many insurers offer discounts on wind damage if homeowners install impact windows or take other hurricane mitigation measures. The specific savings depends on the property, the insurer, and the state.

  • Florida home insurers must offer a hurricane deductible of $500, or 2%, 5%, 10% of the home's value.

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