For those living on the east coast of the United States, the period between June 1 and November 30 is known as hurricane season. Tropical cyclones develop across the northern Atlantic Ocean, making landfall and bringing with them extreme winds, massive amounts of rain and general devastation to the eastern United States. It can take years for communities to recover from hurricanes, leaving thousands without a home and countless others paying off thousands in damages. Stay one step ahead of the storm and learn how to protect your assets in the face of devastation.
Carefully Read your Homeowners Insurance
While there is no such time as "hurricane insurance" the right homeowners insurance policy in combination with flood insurance will cover you through extreme weather conditions.
Let's start with the basics. To protect your assets in the case of a hurricane, read over your homeowners insurance policy and make sure it covers the cost to rebuild your home. It's important to note that the cost to rebuild your home is not the same as your home's real estate value. Calculate the costs and adjust your policy accordingly.
Know your Deductibles
Insurers in 19 states from Maine to Texas include separate deductibles for hurricanes in their homeowners policies. Deductibles are often expressed as a percentage of the insured value of your home—ranging between 1-5%. If your home is insured for $500,000, in the event of a hurricane you might have to pay up to $25,000 out of pocket for damages. The deductible only kicks in when the storm is formally named as a hurricane, so tropical storms and depressions are excluded from the deductible.
If you're a homeowner in a high-risk area, discuss your policy with your insurance company, and play it safe by having the funds for the deductible readily on hand.
With high winds and heavy rains comes the risk of flooding. Home damages that come as a result of flooding are particularly expensive – just 1 inch of water can cost you $10,000 in damages, with the average flood damage insurance claim costing around $30,000.
Depending on where you live, you might be required to have flood insurance when financing your home. If you aren't required to purchase flood insurance, check your community's flood map to decide if your home is at risk for flood-related damages. Depending on where your home is located, you might be able to forgo flood insurance altogether.
Adequate "hurricane insurance" in the form of a proper homeowners policy in combination with flood insurance might end up costing you over $1,000 annually. Additional costs are something to consider when investing in beachfront properties on the eastern United States. With the beautiful sunset views come the risk hurricane damages. Be vigilant and stay informed when it comes to protecting your home from hurricanes.