If your homeowners association property has been damaged in a natural disaster—hurricane, tornado, flood, or fire there are some important steps you can take in the immediate aftermath to ensure your safety and minimize financial loss. Consider the following actions:
Enter with caution
Damaged homes or buildings after a natural disaster could be structurally unsafe; use extreme caution when navigating those areas, and don’t enter unless absolutely necessary. Debris and other hazards are unsafe.
Secure the property
In cases of significant structural damage or security concerns, determine whether the damaged area needs to be secured with temporary fencing or another type of barrier to keep out unwanted guests.
Notify your insurer
Resident’s should their insurance company or your homeowners associations insurance company to inform them there’s been a disaster and to file an official claim. The HOA manager may also be a first contact to help give direction. Take down the claim number and any relevant contact information for whomever will handle your claim. If your vehicle sustained damage, contact your automobile insurer.
Notify utility companies
If property damage includes disruption to water, gas or electric utilities, contact the companies right away to shut off service. Failing to do so could pose a safety risk to you or emergency responders in and around the disaster area.
Take photos of the damage
Beginning with the property’s exterior, take photographs of the damage. If it’s safe to enter the structure, take photographs of interior damage as well. These will important in handy for insurance purposes (especially claims adjudication).
Take inventory of your damaged belongings
Make a list of your damaged personal items and ensure you have photographs. Include the price of large appliances or valuable items with your list and, if possible, surviving receipts.
Depending on the time of year in Florida, the entire state is threatened by hurricanes or flooding. If you live in a homeowners association, find out about natural disasters you should prepare for and be sure to take action by having a plan in place.
EMERGE INSURANCE AGENCY
Understanding the role deductibles play when insuring a car or a home is an important part of getting the most out of your insurance policy.
A deductible is basically the amount “deducted” from an insured loss. Deductibles have been an essential part of the insurance contract for many years and represent a sharing of the risk between the insurance company and the policyholder. When repairing your home or replacing personal possessions, the amount of the deductible would come out of your own pocket.
A deductible can be either a specific dollar amount or a percentage of the total amount of insurance on a policy. Generally speaking, the larger the deductible, the less a consumer pays in premiums for an insurance policy. Deductible amounts can be found on the declarations (or front) page of standard homeowners and auto insurance policies.
Here is how it works: if you have a $500 “dollar deductible,” that $500 would be deducted from your claim. So, if your insurance company has determined that you have an insured loss worth $10,000 you would receive a claims check for $9,500.
Percentage deductibles are calculated differently. They are based on a percentage of the home’s insured value. So if your house is insured for $100,000 and your insurance policy has a 2 percent deductible, $2,000 would be deducted from the amount you are reimbursed on a claim. In the event of the $10,000 insurance loss, you would be paid $8,000.
Deductibles in many parts of the country have been going up. In hurricane prone states, where there is a greater risk of a major catastrophe, special deductibles may apply for homeowners insurance claims when the cause of damage is attributable to a hurricane. These deductibles are generally higher and may take the form of a percentage of the policy limits.
Deductibles for property damage work differently than, for example, a typical health insurance policy where there a single annual deductible for the policy. With an auto or homeowners insurance policy, the deductible applies each time you file a claim. The one major exception to this is in Florida, where hurricane deductibles specifically are applied per season rather than for each storm.
Hurricane deductibles have helped to make more private insurance coverage available in coastal communities at a lower price. This means more choice for consumers. So, consumers who reside in states where competitive markets exist can often shop around for coverage and usually find that they have a selection of insurance policies to pick from that offer a variety of different premiums, coverages and deductibles.
Here are some other important things to know about deductibles:
Raising Your Deductible Can Save Money
One of the best ways to save money on a homeowners or auto insurance policy is to raise the deductible. For example, for auto insurance, increasing the dollar deductible from $200 to $500 can reduce collision and comprehensive coverage premium costs by 15 to 30 percent. Going to a $1,000 deductible can save you 40 percent or more. But, remember that if you have a loss, this amount will be deducted from your insurance claim and that you will be responsible for the difference.
Deductibles Differ by Company and by State
Insurance is state regulated. And insurance companies must follow strict state laws. This also applies to the way deductibles are incorporated into the language of a policy, and how they are implemented. In many states a range of deductibles can be found. So if you are shopping for insurance, you should always ask about deductibles when comparing policies. For homeowners or renters insurance policies, most insurers offer a minimum $500 dollar deductible. However, raising the deductible to $1,000 or more can save upwards of 20 percent on the cost of an insurance policy.
Deductibles Do Not Apply to Liability Claims
There are generally no deductibles for the liability portion of a homeowners or auto insurance policy. Instead, the deductibles apply to property damage. So, on in an auto policy, there is a deductible for the optional comprehensive or collision coverage, but not for the liability portion. And, in a homeowners policy, deductibles apply to damage to the structure of the house or personal possessions but not if a homeowner is sued or a medical claim is made by someone injured in the home.
Flood Insurance Offers a Range of Deductibles
Flooding is not covered by standard homeowners insurance policies but is available from the National Flood Insurance Program (NFIP) and from some private insurance companies. The NFIP offers separate policies for the structure of your home and for your personal possessions, along with a variety of deductibles. You can choose one deductible for the structure and another for the contents of your home. Mortgage companies, however, may require that your deductible be under a certain amount. Flood damage to a car is covered by the optional comprehensive portion of an auto insurance policy.
Percentage Deductibles Apply to Hurricanes and Hail
Hurricanes and Hail: There are two kinds of wind damage deductibles: hurricane deductibles, which apply to damage solely from hurricanes; and windstorm or wind/hail deductibles, which apply to any kind of wind damage. Whether a hurricane deductible applies to a claim depends on the specific “trigger” selected by the insurance company. These triggers vary by state and insurer and usually apply when the National Weather Service (NWS) officially names a tropical storm, declares a hurricane watch or warning, or defines a hurricane’s intensity in terms of wind speed. Due to these differences, homeowners should check their policies and speak to their agent or insurance company to learn exactly how their particular hurricane deductible works. In some states, policyholders have the option of paying a higher premium in return for a traditional dollar deductible. However, in high-risk coastal areas insurers may not offer this option, instead making the percentage deductible mandatory.
Hurricane Deductibles Are Not New: The first hurricane deductibles were introduced into policies over 20 years ago. After Hurricane Hugo hit South Carolina in 1989 and Hurricane Andrew hit Florida in 1992, insurers realized they were far more vulnerable to huge weather-related losses than they had previously thought. In order to be able to continue getting reinsurance (basically insurance for insurers), and thus continue to offer homeowners insurance in high-risk areas it became necessary to require policyholders to share some of the cost by including hurricane deductibles in policies.
Consider Percentage Deductibles When Purchasing a Home
When looking for a new home, it is important to consider the cost of insurance. Coastal properties and other locations at higher risk for a natural disaster may cost more to insure than other locations, and you must add to that a separate deductible for earthquake or hurricane damage. Remember, you will be paying for insurance the entire time you live in your home—if you are a prospective buyer and feel you cannot afford the insurance, then it may be time to consider a different home.
EMERGE INSURANCE AGENCY
Unlike a typical homeowner's insurance policy deductible of $500 or $1,000, hurricane deductibles usually are listed as 1 percent to 5 percent of a property's insured value. The owner of a home with dwelling coverage of $200,000 and a 2% hurricane deductible would pay the first $4,000 of damages from a storm.
A hurricane deductible can be a useful thing. It's a higher deductible than your regular one, and does "lower" the annual premium you pay.
Hurricane deductibles were developed in response to 1992's Hurricane Andrew, which racked up a $15.5 billion bill for insured losses, the most ever from one storm, according to the Insurance Information Institute. As a result, insurers had to lessen their future risks by having policyholders assume more responsibility in the form of higher deductibles, the institute says.
After the recent Hurricane Matthew, we had to tell all or clients with hurricane damage that their hurricane deductible applied.
For 90% of our clients the damage estimate from the claims adjuster was less than the deductible. For example one client's policy has a Coverage A (Dwelling) value of $175,000, and a 2% hurricane deductible of that value ($3,500). The client filed a claims, the claims adjuster assessed the damage, and the damage was assessed at $3,300. So the letter they received was that since the damages were less than their deductible, the responsible for repairs was theirs.
But a small 5% of our clients selected to have a $500 hurricane deductible. Yes their annual premium was higher, but only by an average of$9.50/month.
Should you consider lowering your hurricane deductible? Call us from anywhere in Florida to discuss.
EMERGE INSURANCE AGENCY
If a fire, flood, hurricane, or some other natural disaster were to destroy or damage your home, would you have the right insurance coverage to rebuild your house?
These series of posts are based on the questions consumers most frequently ask, explains what is covered in a standard homeowners policy and what is not. Where gaps in coverage exist, it tells you how to fill them.
To simplify explanations, we assume that you have a policy known as Homeowners-3 (HO-3), the most common homeowner’s policy in the United States. Find out what type of homeowners policy you have. If you have a different policy, you should review your options in question #17.
Question # 16: Am I covered for “Acts of God”?
Answer: Sometimes. The term “Acts of God” is not specifically mentioned in homeowners insurance policies. It usually refers to natural disasters like hurricanes and tornadoes, as opposed to man-made acts, like theft and auto accidents. Some natural disasters, such as damage from windstorms, hail, lightning and volcanic eruptions, are covered under homeowners insurance. Damage from floods and earthquakes is not.
Okay, our next post of common questions asked will be Question # 17: What should I do if my policy provides less coverage than the HO-3?
A current concern if you have enough protection for your home – call us.
EMERGE INSURANCE AGENCY
Cecil Williams -