Is Hurricane Insurance Worth It | Hurricane Insurance Cost

hurricanes are a force to be reckoned with, especially since the season lasts so long and causes damage far beyond coastal areas. For example, hurricane season on the Atlantic coast lasts from June to November, with storms likely to peak from August to October. And while the East Coast and Gulf Coast are most at risk, damage from wind and rain can extend inland.

Long before a hurricane makes landfall, homeowners should assess their insurance needs. That’s because most insurers don’t write policies when a storm is imminent. Several factors influence the cost of hurricane insurance. These include where you live, how much your home is worth, and how much deductible you’re willing to pay.

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hurricane insurance: what does it cover?

Hurricane coverage varies by state. Generally, homeowners insurance will cover damage from wind and wind-driven rain. therefore, if high winds rip the shingles off and water penetrates the roof, the damage is usually covered. Before choosing a policy, read it carefully and look for limitations on wind and water damage.

The fine print is especially important. That’s because more insurers are excluding hurricane damage entirely, says Frank Darras, an insurance attorney in Ontario, California. If you live in states like Florida, Texas, or Louisiana, you may need to purchase homeowners insurance with additional hurricane coverage. Or, you may want to purchase separate windstorm and flood policies.

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Even homeowners policies that don’t exclude hurricanes will generally exclude flood damage caused by rising water levels. Rising water can result from rising groundwater, rising tides, or overflowing of lakes and rivers. Flood insurance is available to most homeowners through the National Flood Insurance Program. homeowners at higher risk of high winds should check with their state insurance commissioner to help determine what additional coverage is needed. Hurricane-threatened states often operate subprime insurance groups that offer hurricane coverage, says David Miller, head of insurance at Brightway in Jacksonville, Fla.

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hurricane insurance: how much does it cost?

The cost of comprehensive hurricane coverage can vary, but averages $2,555 per year. In addition to the premium, policies issued in states that are more susceptible to storms may have hurricane deductibles. They typically range from 1% to 5% of a home’s insured value, but can be higher in high-risk coastal areas.

Hurricane deductibles typically kick in when damage results from a named storm. That means if your home is insured for $300,000 and is damaged in a hurricane, your hurricane deductible will range from $3,000 (1% of the insured value) to $15,000 (5%). while some states allow homeowners to choose the hurricane deductible, others set it. For example, the Alabama Insurance Underwriting Association offers wind/hail/hurricane deductible options of 1%, 2%, 5%, and 10%. remember, the higher the deductible, the lower the premium.

Homeowners should review their hurricane risks and current coverage to see if they need more insurance, Darras says. In addition, he suggests taking into account the state of the house. for example, new construction is more likely to be built to withstand high winds. on the other hand, older houses were not subject to stricter building codes, so they may be more vulnerable. you’ll want to talk to a home inspector or contractor for information on conditions.

how to reduce the cost of coverage

There are ways to lower the cost of coverage. Hurricane mitigation improvements, such as storm shutters and secondary water protection (essentially, an additional layer of waterproofing between the shingles and the roof sheathing), are options. Miami is in one of the most expensive states for homeowners insurance in the country. An older masonry home in Florida with a replacement value of $300,000 and coverage of $150,000, with a 2% hurricane deductible, would have an average annual premium of $9,204 without wind mitigation, protection on your home that helps decrease damage caused by strong winds such as a hurricane. with wind mitigation, the average annual premium would be $4,160.

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If your current homeowners policy sufficiently covers wind damage but not flooding (a common situation), consider a separate flood policy. Just one inch of flood water in your home can cause $25,000 in damage to your home, according to the federal emergency management agency. The average flood policy costs $738 per year, according to Bob Vila.

10 recent hurricanes and tropical storms

source: national environmental information centers

review your policy now

Procrastination is not your friend. Some policies have a waiting period before they go into effect. And once a tropical storm is named or a hurricane watch is declared, it’s unlikely you’ll be able to buy a policy to cover that storm. therefore, allow plenty of time to determine your needs and gather information. Set aside a day to review your current policy and get quotes on additional coverage.

“It all comes down to risk tolerance,” Darras says. “What does your policy cover? Where do you live and what risk do you face? What can you afford? How much risk are you comfortable with? Those are the questions to ask yourself when you’re deciding to buy more coverage.”

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