What Damage is Covered Under Hurricane Insurance?
Posted on Aug 30, 2021
Hurricanes have always been something that people who live in hurricane-prone areas have had to watch for, not only because they can be harmful to humans themselves but also because they can seriously damage personal and commercial property.
Hurricane season lasts from June through November, hitting its peak in September. Still, with recent climate data, it’s projected that hurricanes are becoming more damaging due to sea-level rise and warmer sea-surface temperatures.
Also, hurricane coverage isn’t as generous or straightforward as it used to be. This means that hurricane coverage is more critical than ever. Hurricanes can cause serious damage to homes through wind damage, rain, hail, and flooding. Insurance coverage can vary widely depending on where you live and what type of damage occurs.
For example, hurricane-prone areas like the east coast and gulf coast may not include coverage for wind damage from a hurricane. On a positive note, most standard homeowners insurance policies do cover damage from hurricanes, but often they don’t include flood damage.
What Hurricane Insurance Does and Does Not Cover
The main reason hurricane insurance coverage is so convoluted and can vary so widely is that insurance policies don’t specifically cover hurricanes but rather for damage that can result from hurricanes. Hail damage, for example, may be covered in your homeowners’ insurance policy; all the damage incurred by a hurricane may not be.
As mentioned earlier, flooding is one example that is most often excluded from coverage. Homeowners who are worried about flood damage from a storm surge should look into buying separate flood insurance. Additionally, U.S. law requires people who live in areas with a high risk of flooding and buy a home with a federally-backed mortgage, purchase flood insurance.
It’s important to check for all damage that may be caused by hurricanes, along with flooding. Although some standard insurance policies include wind damage, others in hurricane-prone areas don’t. Therefore, it’s imperative to find out exactly what your insurance does cover. For example, if your policy does not include wind and hail damage, you might consider buying windstorm and hail insurance too.
What Damage is Covered Under Hurricane Insurance?
According to the Insurance Information Institute, damage that is usually covered by standard homeowners’ insurance includes lightning, hail, fire, vandalism, explosions, and theft.
What Damages Are Not Covered Under Hurricane Insurance?
Besides flooding and sometimes wind damage, other damages that usually aren’t covered include: earthquakes, volcanic eruptions, war, and damages resulting from neglect. Sewer backup is also not covered by insurance across the board, but you can add sewer backup to your insurance coverage. If you’re in an area prone to heavy rainfall and flooding, it’s probably worth it to purchase both sewer backup and flooding coverage to make sure that you’re covered.
Lastly, evacuation and temporary relocation aren’t covered by insurance policies. But if you return to a home that isn’t liveable, your insurance provider will usually pay for a hotel and possibly other costs while you are living elsewhere.
Deductibles Related to Hurricane Coverage
If your homeowners insurance does cover hurricane damage, then insurance claims may be contingent on a separate deductible. Hurricane deductibles are often higher than standard homeowners insurance. They are usually set as a percentage between 1% and 5% of your home or dwelling coverage.
For example, if you are covered for $100,000, and your hurricane deductible is 1%, you would have to cover $1,000.
Most states on the East coast allow insurance companies to require an individual hurricane deductible. You may be able to pay a higher premium to get a lower deductible. The National Weather Service determines when a storm is an official hurricane, resulting in a hurricane deductible. Hurricane deductibles can be expensive, but many people consider them necessary protection for those in areas prone to hurricanes.
Nineteen states, plus Washington D.C., have hurricane deductibles: Alabama, Connecticut, Delaware, D.C., Florida, Georgia, Hawaii, Louisiana, Maine, Maryland, Massachusetts, Mississippi, New Jersey, New York, North Carolina, Pennsylvania, Rhode Island, South Carolina, Texas, Virginia.
Hurricane Commercial Coverage
Along with private properties, commercial properties can suffer devastating losses from hurricanes. Like homeowners insurance policies, commercial insurance, also referred to as business insurance, for hurricane damage can also be complex. Commercial coverage can vary widely, but for the most part, it covers:
- Buildings and structures: Hurricane insurance usually covers damage to buildings on commercial property, along with other structures on the property like fences.
- Office contents: Hurricane insurance usually covers the contents within the office, which includes most internal property.
- Inventory: Most insurance providers cover inventory and cargo that has been damaged in a hurricane.
Commercial hurricane insurance varies widely or doesn’t cover the following:
- Equipment: Machinery, vehicles, and other equipment may or may not be covered. What is covered can change depending on what plan your business has.
- Flood-damaged properties: Like homeowners, commercial property owners generally are not covered for flood damage. However, they are covered if they have a separate flood insurance policy.
