Hurricane Insurance, Are you covered?

Hurricanes are often referred to as ‘havoc wreaking monsters’. They can sustain wind speeds in excess of 157 miles per hour and spawn tornados, hail storms, and devastating floods. In 1992, for example, Hurricane Andrew hit the United States three separate times with storm categories of 5, 4, and 3 and a wind speed of 165 mph. This storm caused the largest amount of damage in history, to date, with losses equaling twenty-six billion dollars and a death toll of sixty five.
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Following the devastation of Hurricane Andrew, it became necessary for the insurance industry to re-evaluate the insurance processes pertaining to hurricanes. According to the Insurance Information Institute, the following changes were made:
 
* More carefully managed coastal exposure.
* Larger role of government in insuring coastal risks.
* Introduction of hurricane deductibles.
* Greater use of reinsurance capital from around the world.
* The birth and rapid evolution of sophisticated catastrophe modeling.
* Strong support for strengthened building codes and the importance of
   enforcement of these codes, as well as enhanced understanding of the necessity of
   mitigation.
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Currently, an additional insurance policy is required for hurricane coverage in high risk coastal states. In many areas, hurricane insurance is in force once the National Weather Service has named a storm.
 
Here are some basic facts:

• Coastal states have increased potential for damage caused by tropical storms from

June-November.

• A standard, set dollar amount deductible for perils such as fire and theft on your homeowners policy does NOT apply to your hurricane policy. 
• The deductible for hurricane insurance is a percentage amount based on the insured value of the home. For example: If the insured value is $100k and the hurricane insurance requires a 5% deductible, the out of pocket cost would equal $5k. Deductibles may be dictated per state.
• The deductible for hurricane insurance is a percentage amount based on the insured value of the home. For example: If the insured value is $100k and the hurricane insurance requires a 5% deductible, the out of pocket cost would equal $5k. Deductibles may be dictated per state.

Discuss the insured value of your home with your insurance agent on a yearly basis so you clearly understand your personal financial risk for hurricane insurance.
 
The following is an explanation of insurance terms that may be unfamiliar to you from the Insurance Information Institute:

• Beach Plan, FAIR (Fair Access to Insurance Requirements) Plan; and other involuntary or residual markets: insurers of last resort, state-run pools that provide insurance to people who are unable to obtain insurance in the voluntary market. Beach Plans operate in specific coastal territories, defined by zip codes, counties or geography; FAIR Plans are generally statewide.
• Deductible: amount of loss paid by the policyholder before insurance kicks in.
• Dollar deductibles: a flat dollar amount.
• Mandatory deductibles: may be set by insurance rules, regulations or state law, or by an insurer.
• Market Assistance Plan (MAP): a voluntary clearinghouse and referral system designed to put people looking for insurance in touch with insurance companies that have agreed to take on more business.
• Optional deductibles: mostly used in less vulnerable areas. Policyholders may opt for these higher deductibles in order to pay a lower premium.
• Percentage deductibles: calculated as a specified percentage, for example 2 percent, of the insured value of the property.
• Standard deductibles: an indication of the usual homeowners insurance deductibles in the state or area.
• Trigger: an event that is needed for a hurricane deductible to be applied. Hurricane deductibles are “triggered” only when there is a hurricane, or a tropical storm. Triggers vary by state and insurer and may apply when the National Weather Service (NWS) "names" a tropical storm, declares a hurricane watch or warning or defines the hurricane's intensity. Triggers generally include a timing factor, i.e., damage occurring within 24 hours before the storm is named or a hurricane makes landfall up to as long as 72 hours after the hurricane is downgraded to a lesser storm or a hurricane watch cancelled.

 
Questions? Call Morgan Elite Specialist Services at 281-201-1110 or visit messtx.com. Our team of certified Public Adjusters are experts on property loss adjustment who can assist policyholders in preparing, filing, and adjusting insurance claims. 

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