Does Homeowners Insurance Cover Hurricane Damage?

Homeowners insurance and hurricane damage

Hurricanes are among the most destructive forces of nature. Unfortunately, a large portion of the United States is susceptible to hurricane damage. Often spinning northward from the tropical waters of the Gulf of Mexico, hurricanes are severe storms that can batter coastal areas for sustained durations. Along with destructive winds, a hurricane can bring torrential rain that lingers for days, leading to flooding.

Hurricane season in the Atlantic region typically runs from June 1 through November 30. That’s a long stretch of time during which a hurricane or powerful tropical storm could occur. The time to think about hurricane insurance isn’t when the storm is approaching — it's before hurricane season arrives. Take the necessary steps to protect your home and personal belongings from natural disasters well ahead of time.

Read on to find out what your homeowners insurance policy covers and whether or not you need additional flood insurance.

 

Hurricane damage and home insurance — table of contents:

• What is hurricane insurance?
• What's covered?
• What is a hurricane deductible?
• Named storm deductibles
• Wind coverage
• List of the costliest hurricanes
• Which states are susceptible to hurricanes?
• Why do insurance carriers pull out of states when a hurricane is about to hit?
• Can I increase my insurance preceding a hurricane?
• Does condo insurance cover hurricane damage?
• Does my policy cover debris removal?
• Hurricane insurance considerations

 

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What is hurricane insurance? 

The term “hurricane insurance” is a little misleading: there is no insurance coverage for hurricanes specifically. The damage caused by hurricanes comes from different sources, including wind and flooding from storm surge and rain. As such, home insurance coverage in a hurricane often comes down to what element of the storm — or its aftermath — is responsible for the damage.

For instance, most homeowners policies will cover wind damage, but if the damage was the result of flooding, you may be out of luck. If you live in an area at high risk of hurricanes or other strong storms, insurers may limit — or withhold — wind damage coverage. Learn more about windstorm insurance.

If wind coverage is not included as part of your home insurance policy, you can seek out a special endorsement. The specifics of your policy will be clearly defined on your homeowners policy declarations page. If you are uncertain, reach out to your insurer to confirm you are properly covered.  

 

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What does homeowners insurance cover in a hurricane?

Standard perils (causes of loss) are most often covered during a hurricane. Unless specifically noted on your policy, wind damage to your home, personal possessions, or structures on the property attached to the primary dwelling should be covered. Your personal property coverage may depend on your individual plan, while other structures are typically covered up to 10% of the primary dwelling limit.

For instance, imagine that a hurricane damages your detached garage. If your primary dwelling was covered for $250,000, your garage would have up to $25,000 of available coverage. Bear in mind, however, that this might be subject to a separate deductible than your primary dwelling that’s known as a hurricane deductible (more below), which we’ll discuss in more detail below. 

 

What does homeowners insurance not cover in a hurricane?

Flood damage is not covered by standard home insurance policies. This pertains to storm surges or water damage brought on by wind as well. Flood insurance can be purchased through the National Flood Insurance Program (NFIP) — a Federal Emergency Management Agency (FEMA) program — or through a private insurance provider.

Acquiring a separate flood insurance policy is typically the only way to insure against flooding. Explore how to sufficiently insure your home for flood damage.

 

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What is a hurricane deductible in insurance?

Though hurricane-specific insurance doesn’t exist, hurricane deductibles do. A deductible is a sum you agree to pay before your insurance kicks in to cover a loss. Many hurricane-prone states may require that a special “hurricane deductible” be written into home insurance policies.

A hurricane deductible kicks in only when a hurricane occurs. Your declarations page will list the specific circumstances that trigger this deductible. Qualifying circumstances may differ depending on your insurer, the state in which you live, and whether or not you reside in a high-risk area. 

Hurricane deductibles are usually not set at a fixed dollar amount, but instead a percentage of your dwelling coverage, typically between 1% and 10%. If your home is worth $250,000 and your hurricane deductible is 5%, you would be responsible for covering up to $12,500 of damages. This far exceeds the deductible on most homeowners policies. Even though it’s expensive, it gives you a chance of recovering from a potentially devastating storm.

See the data below to see what you can expect to pay in premium in states that have hurricane deductibles.

AVERAGE PREMIUMS BY HURRICANE DEDUCTIBLE AMOUNTS

State	1%	2%	No Deductible
Alabama	$2,266	$2,258	$1,947
Delaware	$826	$815	$716
Florida	$2,741	$2,666	$1,572
Georgia	$1,240	$1,236	$1,196
Hawaii	$821	$803	$349
Louisiana	$2,645	$2,622	$2,037
Massachusetts	$875	$861	$916
Maine	$695	$691	$695
Mississippi	$2,180	$2,171	$1,929
North Carolina	$1,753	$1,722	$1,661
New Hampshire	$739	$738	$722
New Jersey	$739	$734	$706
New York	$975	$973	$980
Rhode Island	$1,223	$1,204	$1,087
South Carolina	$1,626	$1,608	$1,556
Texas	$2,679	$2,653	$2,387
Virginia	$1,303	$1,297	$1,294

 

With their ability to cause widespread damage and expensive claims, hurricanes can put homeowners insurance companies at substantial financial risk. The hurricane deductible offloads more of this risk to the homeowner and makes insurance premiums more affordable for the company's customer base.

In most cases, the hurricane deductible must be paid on the primary dwelling as well as each covered structure. Also, a separate hurricane deductible may be required for your personal property, as well. This is an important distinction from a standard homeowners deductible, and one that you don’t want to catch you off guard.

 

Hurricane insurance deductible: duration and details 

Hurricanes are not limited to a single damaging event. Devastating wind, rain and flooding can continue for days on end. As such, a hurricane deductible (or another applicable deductible) may kick in when a hurricane watch or warning is enacted in any part of your state. This continues while hurricane conditions are present, stretching for 72 hours after hurricane conditions subside. 

Note that each state determines its own triggers for hurricane deductibles, so check your policy. A storm’s designation at the time it makes landfall can represent a difference of thousands of dollars in deductible payments.

 

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Named storm deductible

Hurricanes are specifically categorized by the National Weather Service (NWS), but other deductibles can be applied to less powerful storms. A “named storm deductible” typically includes hurricanes and any other storm named by the NWS or National Hurricane Center.

 

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Homeowners insurance wind coverage

Wind and hail are perils covered by most homeowners insurance policies. A key peril created by many hurricanes, wind has the potential to cause serious damage on its own. Even a Category 1 hurricane can have winds between 74 and 95 miles per hour enough to harm a home's siding, roof, or trees in the area. 

A windstorm deductible, like a hurricane deductible, must be triggered as the result of wind, though it does not have to be a result of a hurricane. In some states, tornadoes can trigger such an event. Areas prone to strong windstorms or tornadoes could face a separate deductible for wind damage. In Texas, for instance, a windstorm deductible typically applies across the board, not just in cases of hurricanes or other named storms. 

In some areas of the country, windstorm coverage may be excluded from standard homeowners policies. If this is the case in the region in which you live, you’ll need to add the coverage through an endorsement. 

 

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The costliest hurricanes in United States history

Because of their sheer size and scale, hurricanes can cause widespread damage. The storms have caused billions of dollars of damage in the US in recent years. The National Oceanic and Atmospheric Administration (NOAA) ranks the top five costliest US hurricanes as follows:

 

Hurricane	Year	Cost
Katrina	2005	$161 billion
Harvey	2017	$125 billion
Maria	2017	$90 billion
Sandy	2012	$71 billion
Irma	2017	$50 billion

 

The year 2017 set a new record for cumulative damage, counting 16 individual weather events causing at least $1 billion in damages, resulting in a damage total of $306.2 billion for the year.

 

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What US states are most susceptible to hurricanes?

Every state along the Gulf of Mexico or the Atlantic Ocean — including Washington D.C. — is susceptible to hurricane damage. 

While not every one of these states experiences hurricanes on a regular basis, the potential for damage is very high if a storm does occur. Even areas and states further inland can be affected by such storms, as exemplified by the devastating flooding in western North Carolina in 2018.

 

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Why do insurance carriers pull out of states when a hurricane is about to hit?

Sometimes referred to as a moratorium — the period in which insurance companies pull out of or pause coverage in certain areas ahead of a natural disaster — this approach is an increasing concern for homeowners in high-risk states. But why do insurance companies stop issuing coverage when it’s needed most? The answer, unfortunately, comes down to costs. Moratoriums allow insurance companies to avoid overextending their spend by taking on more risk than they can afford. Without a moratorium, insurance companies can find themselves in a position where they do not have enough to pay out existing claims. 

Homeowners insurance works by spreading out risk over a large number of homeowners via premiums; for example, each homeowner pays to insure against a random damaging event, like a tree falling or house fire. The problem with this model begins when a large-scale disaster damages several homes at one time— insurance companies must then pay high amounts in claims and in turn, raise premiums for policyholders. This has happened in states like Florida so many times that insurance providers have had little choice but to stop covering that area completely to avoid such catastrophic losses. When a moratorium occurs, the following actions will be in effect until lifted:

• Current policyholders will be unable to change any limits or coverages in their policy.
• New applicants are restricted from purchasing a new policy with this insurer.
• Existing customers cannot switch insurance carriers. 

When insurance companies pull out of areas ahead of a natural disaster, they are avoiding providing coverage to homeowners who have just enrolled to protect themselves from the incoming disaster. In other words, the company is protecting its own assets and current policyholders.

 

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Can I increase my home insurance coverage when a hurricane is in the forecast?

When a hurricane is in the forecast, insurance companies — including federal organizations through which flood insurance is purchased — will not allow you to bump up your coverage. For instance, any new federal flood policy usually requires a 30-day waiting period before it kicks in. This highlights the importance of preparing for such storms in advance and not waiting until it’s too late.

Many coastal states subsidize wind pools, in which the state opts to provide coverage for those in high-risk areas.

 

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Does condo insurance cover hurricane damage?

If you live in a condo, it is often up to your homeowners association (HOA) to purchase coverage for the exterior of your building as well as any shared grounds. However, it is still up to you to purchase insurance for the contents of your condo. A condo insurance (HO-6) policy would kick in to cover the interior of your unit as well as your personal possessions.  

Like homeowners policies, there are limits to condo insurance hurricane coverage. Flooding, for instance, is still not covered, though wind damage usually is. This goes for both your HOA policy as well as your personal condo insurance policy.

 

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Does my homeowners policy cover hurricane debris removal? 

In the wake of a powerful storm, the cleanup can be daunting. Even if your home managed to escape relatively unharmed, your property could be strewn with downed trees, branches or other refuse. 

The “additional coverages” portion of your homeowners policy usually includes a section specifically for debris removal. This most often applies to trees or branches that have fallen on your house or are blocking driveways. Coverage is typically capped at $1,000 or $500 per tree.

 

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Hurricane insurance considerations

As noted above, hurricane insurance doesn’t really exist as a separate coverage. Depending on where you live, you may need to take steps to protect yourself in the event of a serious storm. 

Some of the steps you can take include determining whether or not your state has a special wind pool or hurricane deductible. If you live in an area at risk of flooding, it’s worth considering NFIP flood coverage. 

While it’s impossible to fully shield your home from powerful storms, these steps can go a long way toward helping you recover. Getting homeowners insurance is a great start in protecting your assets — enter your ZIP code below to compare rates instantly.

 

Sources

• Tropical Cyclone Climatology
• Windstorm and Hurricane Deductibles
• Florence Flooding in North Carolina
• National Hurricane Center
• Hurricane Deductibles
• Insurance Journal | Hurricane Deductibles
• FEMA Insurance Programs
• Factors on Hurricane Costs

 

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