Hurricane season, which runs from the first of June to the end of November, is nearly here. That makes May a great time to check your insurance policies to be certain you have the right coverage. Remember, preparing now means that damage later won’t be as detrimental to your finances.
Here are the things to consider.
Home Structure Coverage
Standard homeowners policies cover your home’s structure against covered perils. This usually includes structural damage from fire, leaks, fallen trees, or storm damage. When looking at this coverage, check to see:
- Is the policy limit enough? In other words, could you rebuild your home with the amount of coverage you have? Keep in mind that what you could sell your home for is not the same thing as what it would take to rebuild the home. You can find online calculators that can help you determine the cost to rebuild your home.
- Hurricane/windstorm deductible: Although you have a standard deductible for most covered perils, coastal states, like Florida, have a separate deductible for hurricanes and windstorms. You can find this deductible on the declarations page of your policy. This deductible is usually a percentage of the insured value of your home. Typically, deductibles are between one and five percent. The more likely you are to be hit by a hurricane, the higher the deductible is likely to be.
- What does your policy cover? Check your policy for exclusions. These are perils that are not covered by your policy. The most common exclusion is flooding, and since hurricanes often cause flooding, you may want to consider adding a separate flood insurance policy. Sewer backups are another common exclusion. Once again, purchasing insurance for this event is a good idea in hurricane-prone areas.
- What are the condo bylaws? If you live in a condo, it is a good idea to understand what the condo association covers and what is up to you.
Personal Possession Coverage
The personal possession portion of your coverage will repair or replace the items in your home. This includes things like clothing, furniture, small appliances, electronics, and more. This insurance covers your personal possessions lost or damaged due to a hurricane, but is the coverage enough? Here are things to consider.
- Create a home inventory. This is a complete list of everything you own. The inventory should include as much information as possible about each item including when and where it was purchased, the original purchase price, serial numbers, warranty information, and photos. As an added bonus, having an inventory list is a great help if you have a claim.
- Do you have enough coverage? Most standard policies offer personal property coverage at 50 to 70% of the structural coverage.
- Do you need additional coverage? Some items, like jewelry, art, and guns have a payout cap. You may need an extra rider for additional coverage for these items.
Additional Living Expenses (ALE) Coverage
This part of the policy covers living expenses if you are unable to live in your home due to a covered peril. As you rebuild your home, ALE covers things such as:
- Loss of rental income
Typically, ALE coverage caps at 20% of the structure coverage.
Aftermath Adjusters & Consulting suggests reviewing your policies yearly. That way, if a disaster strikes, you are prepared. If you need help filing an insurance claim, we are here to help.