Is hurricane insurance worth it?

Thu May 16 2024

Home with debri scattered in the yard after a hurricane

Hurricanes are a part of life for people in the south and southeast, and that makes hurricane insurance worth it in those areas. 

Chances are, though, most homeowners along the Gulf Coast or near the Atlantic Ocean realize the risk. They’re constantly reminded of the threat of hurricanes. Even out of season, homeowners are inundated with predictions for the upcoming season and hurricane preparation tips. Some states even have tax holidays on hurricane preparation supplies.

Let’s take a look at what hurricane insurance is and why it’s so important when you live along the coast.

What is hurricane insurance?

The first thing to know about hurricane insurance is that in most cases it’s not a separate product you can buy. Damage from high winds is usually covered under your standard home insurance policy.

We say wind damage usually because some insurance policies exclude wind damage for homes along a coast. Homeowners in that situation have to find wind-only insurance if they want protection from the costs associated with tornado and hurricane damage – often by going to a state-run program designed to help people get the coverage they need.

Of course, wind is only a part of the threat hurricanes pose. Flooding can also cause significant damage. That kind of damage is not included in a standard home insurance policy. It is, however, covered by flood insurance.

Simply put, if your insurer excludes windstorms, seek separate wind-only coverage. You may also want to get a separate flood protection policy because standard home insurance policies do not include flood damage.

A closer look at flood insurance

Flood coverage is not provided under the provisions of a standard home insurance policy. Many homeowners don't realize this until it is too late. People often get flood insurance through a federally managed program facilitated through private insurance agencies.

Five misconceptions about hurricane insurance

1. It is a standalone coverage.

In many states, there is no such thing as hurricane insurance.

2. It covers damage from flooding.

Flood insurance is a separate protection that is not provided in standard homeowners' insurance policies.

3. Wind damage is always covered under a standard homeowners insurance policy.

While it is true that wind damage is often covered under standard homeowner's insurance policies, that’s not the case in all areas. Some insurers may exclude wind damage in coastal areas.

4. Hurricane protection is always optional.

Insuring your home adequately is usually required if you have a mortgage on your property. So depending on the risks in your area, you may have to get coverage for wind and flood damage.

5. I don't need flood insurance unless I live near water.

Not true. Inland flooding can be a big issue due to heavy rains associated with hurricanes.

Is hurricane insurance necessary?

Protection from hurricane damage is necessary if you live in a catastrophe-prone area. In fact, your mortgage provider most likely requires hurricane coverage if you’re located in a place where your risk is high.

Luckily, most people have coverage for windstorms in their home insurance policies. But what if your homeowners policy doesn’t cover hurricane wind? Or what if your mortgage lender doesn’t require flood insurance? Then other factors may influence your decision, such as:

  • Property vulnerability. Properties along the coast and in low-lying areas are more prone to damage from hurricanes. However, climate change is bringing larger and more dangerous storms, putting more people at greater risk.

  • Personal risk tolerance. Some people are more willing to take a risk than others and may be willing to gamble on the chance of suffering a total loss. 

  • Coverage cost. Wind-only policies and flood coverage can be pricey, so some homeowners may choose to not get either. 

As the homeowner, you do need to weigh each of those considerations while keeping in mind the cost of rebuilding should you experience hurricane damage.

What statistics have to say about hurricane risk

Before you decide that your property isn’t vulnerable to hurricane damage, check out these statistics about hurricane risk.

  • Since 1980, hurricane damage has averaged almost $23 billion per event.

  • Storm surge and flooding caused nearly 90% of hurricane-related deaths over the last 50 years.

  • Hurricane flooding can last from days to weeks, often creating mold problems and cracked walls and foundations.

  • To qualify as a hurricane, a cyclone must have winds reaching 74 mph.

  • A Category 5 hurricane has winds over 156 mph.

  • One of the most common damage claims from hurricanes is roof damage.

Government assistance programs

We often hear about the millions, or even billions, of dollars the federal government makes available following a damaging hurricane. This can provide an illusion of a safety net for homeowners. 

Much of this money gets targeted to areas for trash, tree, and debris removal and restoration of services. When government financial relief targets citizens, it is often intended for immediate and basic needs, not total losses.

Long story short? Government assistance after a disaster is almost never enough to help you rebuild.

Conclusion

Deciding whether it’s worth getting hurricane insurance does require some due diligence on your part, but we can help. Our representatives will walk you through your risk and our coverage options to make sure you have the appropriate coverage for your situation, or you can use our easy online application to get a quote. Contact us today.

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