As we all know, hurricanes can be deadly forces of nature. Even in countries like ours, where technology allows for hourly reports of the advancing storm days before it actually reaches us and there are plenty of shelters to protect ourselves if home is not the safest place to stay, these systems can wreak havoc to our daily lives. Many of us in South Florida still remember the mess left behind by Hurricane Andrew, which caused 65 deaths and $26 billion in damages. More recently, Hurricane Katrina cost the lives of 1,836 people, mostly in New Orleans and $81 billion in damages, making it the costliest natural disaster in United States history. As a consequence of these storms, the homeowner’s insurance market in the areas affected by these storms changed forever.
Yet, despite our personal experiences, I have often found that people tend to ignore some basic facts about homeowner’s insurance and I would like to take this opportunity to remind our readers about these facts.
Unfortunately, many people whose properties are located in flood areas do not know that their homeowners’ insurance policies do not cover flood damage. This coverage is available from the National Flood Insurance Program (NFIP), but has to be purchased separately. It is important to know that although the National Flood Insurance Program is a federal program under FEMA, the coverage is sold through most insurance companies. To find out if your community is eligible under the program, please visit FEMA’s website.
Another disturbing fact is that people tend to underestimate the risk that flood poses to our homes. According to FEMA, homes have a 26 percent chance of flooding during the life of a 30 year mortgage. By comparison, home face only a 9 percent risk of being damaged by fire during the life of a similar mortgage.
The 30 Day Clause
Flood insurance cannot be bought by the time you learn of an upcoming storm. Actually, the policy can be bought, but it will not cover the impending storm because of the 30 day clause which clearly states that coverage begins 30 days after purchase. This is one very important reason why FEMA recommends you plan ahead and get coverage long before a storm announces your home’s impending doom…
Typically, the deductible in a windstorm policy for damage caused by hurricanes is calculated based on the property’s value. It ranges between 1 percent and 5 percent. Therefore, if your home is valued at $200,000 and has a 2 percent wind damage deductible, your portion of the bill for repairs will be $4,000.00. Please note that in some areas with high wind risk, the hurricane wind damage deductibles can be as high as 10 percent of the home’s value.
Premiums for Flood Insurance
Although the average premium for flood insurance in 2010 was about $600.00 a year, it can cost as much as $3,900.00 a year for $250,000.00 worth of coverage in a coastal zone. Check out the NFIP’s Floodsmart website to estimate how much it would cost to obtain this coverage for your house.
Coverage From National Flood Insurance Program is Limited
The maximum coverage available from the National Flood Insurance Program is $250,000.00. Therefore, considering that many homes today are worth considerably more than that, it is recommended that you purchase additional flood insurance from a private insurer. Please note that this additional coverage is available yet, the operative word being “additional”, means that you first have to purchase NFIP protection to qualify.
The Lawyers of Greenberg Stone and Urbano Can Help
Regardless of what kind of coverage you would like to see included in your homeowners insurance policy, you should have an attorney help you review your policy and advise you on what coverage you should have and for how much. Visit our website to learn more about our firm and contact us today for a free consultation.
With more than 75 years of combined experience, the Miami Dade County Homeowners Insurance Claims Law Offices of Greenberg Stone and Urbano have helped thousands of homeowners all over Florida review their policies, present their claims and get the compensation owed them by their insurance carrier.