Hurricane Insurance Questions You Should be Asking Yourself
We all hope that the hurricanes will pass us by again this year. However if hurricanes do strike us, there are important Homeowner Insurance coverages that you should evaluate to be sure they are adequate and correct. Negligence in keeping your Homeowners Policy current can be very costly at the time of a loss.
Here are a few tips to help you come through a loss without horrific surprises.
1. If your policy property limits are too low, as compared to the replacement cost value of your
home, you could be subject to a significant coinsurance penalty if a loss occurs. Make sure that
any additions or improvements that you have made to your home are included in the value of your home as shown in the policy dollar limits for your home. In today’s economy, the cost to replace your home is very likely to exceed the market value of your home.
2. Do carefully consider placing Flood Insurance on your home. Even if you are not in a Flood
Zone, you could be subject to flooding. Often times, storm sewers will plug with debris; critical
storm sewer pumps will fail; or, in Okeechobee, the dyke could fail and lead to flooding in places that never flooded before. If you are not in a hazardous Flood Zone, the insurance is relatively cheap and affordable. Remember, your Homeowners insurance does not cover flooding.
3. Ordinance of Law Coverage is often times misunderstood and many times homeowners are not even aware of this endorsement. Some companies offer coverage automatically at 25% of the
Limits used on the home. Some offer endorsements to raise that coverage to 50%. Replacement
Cost Value (RCV), by definition, contemplates rebuilding your home exactly the way the home
was at the time of loss. As building codes change over the years, it is common for homes to be
lacking in regards to the latest building codes. The last major building code changes were made in 2002 and if you have a home that is older than that, you will certainly do yourself a favor in
checking out this coverage. Even if you have a new home and suffer partial damage, Coverage
“A” will provide coverage for the value of the undamaged portion of the structure rendered
unusable and valueless by a building inspector applying an ordinance or law. A homeowner
policy pays only for the damaged portion of the home. If after a loss, a code enforcement officer
requires the undamaged portion torn down, you will be required to pay the cost of rebuilding that
remaining portion of the structure. A Homeowner Policy without this endorsement does not cover the undamaged part of the building that is condemned. Coverage “B” covers the cost to tear down the undamaged part of the building and to remove the resulting debris from the site. Coverage “C” covers the increased cost of construction to bring the structure up to code. On Commercial Policies, an endorsement is available to provide for an increased period of restoration to meet code enforcement requirements. On a Personal Lines Policy, Loss of Use coverage generally gives that added time.
4. When it comes to personal items, remember that certain items such as guns, securities, antiques, jewelry, fine arts etc. have little or no coverage on a homeowner policy without a special endorsement covering their value. It is wise to inventory and video your personal belongings and keep them at a different location.
Do not wait until it is too late to evaluate and take care of the items listed above. Remember, once a hurricane enters a prescribed longitude and latitude specified by your insurance company, all binding (changing) of property insurance is on hold until after the threat passes. Sometimes that can be as much a week or more before the hurricane actually makes landfall. It is critical to your financial well-being, as well as your physical well-being, that you plan well in advance for the next hurricane.
Wishing you, and your family, a safe and secure hurricane season,
Lowell Pritchard
President
