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Hurricane insurance guide

Fact-checked with HomeInsurance.com

The hurricane season runs from June 1 through November 20, and experts say that 2020’s season will have above-average activity. Once you’ve lived through a hurricane, you know they can be unpredictable and frightening with severe damage that is widespread and devastating.

If you live in one of the Atlantic states that frequently sees hurricanes, hurricane insurance can be a comforting addition to your homeowner’s coverage. Some hurricane damage may not be covered by your homeowner insurance policies, but it is generally possible to get more comprehensive hurricane coverage — at a cost — from insurers in regions where hurricanes are common.

What is hurricane insurance?

Hurricane insurance is coverage that will help you repair or rebuild after a catastrophic hurricane. Insurers who sell policies on the Atlantic coastal area may offer this type of insurance as an addition to basic homeowners policies.

To understand the coverage you need following a hurricane, it’s important to understand the types of perils that constitute a hurricane, which can include:

  • Flooding
  • Heavy rainfall
  • Sewer back-up
  • Storm surges
  • Tornadoes
  • Wind 

These can be roughly divided into two categories: damage caused by wind and the accompanying storm and damage caused by water. Whether you are covered by your homeowners policy will depend on what caused your damage. Some insurers cover wind damage as part of the basic policy. Others, particularly in states where hurricanes are common, may require you to purchase an additional rider for wind damage. Flooding, too, requires an additional policy.

Claims you make for hurricane damage will be subject to your deductible. For example, if your deductible is $1,000, your claim amount will be reduced by the amount of the deductible when you receive your refund. There will also be limits to the amount you can claim for damage following a hurricane. Your insurance agent can tell you what your limits are, or you can review them in your policy documents.

One factor that will play a role in your claim is whether you have actual cash value (ACV) or replacement cost insurance. The former is cheaper but will only pay out for what the damaged item is worth at this time. So, for example, if you have ACV coverage and your 10-year-old couch is destroyed by rain flooding through a broken window, your payout won’t be high because the depreciated value of a couch that’s 10 years old is probably low.

Replacement value, on the other hand, has a higher premium cost but may lead to a greater payout. With our couch scenario, replacement cost insurance would give you enough money, after accounting for your deductible, to buy a new couch of similar quality to the old one. 

Does homeowners insurance cover hurricane damage?

HO-3 homeowners policies, which are the most common type of policy, cover certain named perils. A peril is something that causes damage, such as a hail storm, fire, or wind. If you live in a high-risk area, you may need to augment your basic policy for hurricane coverage.

Although wind damage is covered in many basic homeowners policies, it may not be if you live in a hurricane-prone area. Some insurers exclude windstorm insurance, so you would not be covered for hurricane-force wind damage. If that’s the case, talk to your agent about adding an endorsement, or add-on, for windstorm coverage.

Another factor that plays a role in answering the question of what does hurricane insurance cover is this: in 19 hurricane-prone states and Washington, D.C., you are required to pay an extra amount before your insurer will cover damage caused by a hurricane. Usually, this amount is a percentage of your home’s value.

States where hurricane deductibles apply:

  • Alabama
  • Connecticut
  • Delaware
  • Florida
  • Georgia
  • Hawaii
  • Louisiana
  • Maine
  • Maryland
  • Massachusetts
  • Mississippi
  • New Jersey
  • New York
  • North Carolina
  • Pennsylvania
  • Rhode Island
  • South Carolina
  • Texas
  • Virginia
  • Washington D.C.

Even if you pay the hurricane deductible, you may find that there are gaps in your coverage that you should be aware of. The biggest one is flood damage. Most homeowners policies don’t cover flooding. If you live in a flood-prone area, you can purchase an additional flood insurance policy through your insurer that is part of FEMA’s National Flood Insurance Program.

Other factors include the type of policy you have, where you live and how the damage was caused. Although it’s not fun reading, it pays to carefully review your insurance policy before you experience loss from a hurricane to ensure that you have comprehensive coverage. 

How are hurricane deductibles calculated? 

As we noted above, if you live in one of the 19 listed states or Washington, D.C., you are required to pay a hurricane deductible before your insurer will pay out on a claim. This is different from your regular deductible, which you choose when you purchase a policy and is for a set amount, such as $1,000. Usually, the hurricane deductible only kicks in for a named hurricane. Your regular policy should cover you if you suffer damage such as torn roof shingles in a wind storm that is not a hurricane.

A hurricane deductible, on the other hand, might be 5 percent of your home’s worth, so on a $200,000 home, you’d have to foot the bill for $10,000 worth of the damage before your insurer will pick up the rest of the cost. When you get hurricane quotes, keep this in mind because there could be a significant difference between your basic deductible and your hurricane deductible.

What type of hurricane coverage do you need?

Although wind damage is the first thing people think about when it comes to hurricane insurance, water can cause the most damage to your property. If you are in a low-lying area or flood zone, you could experience flooding. Even if you don’t, you may have to deal with sewer back-ups or smaller-scale water damage from broken windows or a damaged roof. Sewer back-ups may be covered in your basic policy, depending on whether they originate in your home or at street level. Check with your agent to be sure.

If you rent your home, you may still want to consider hurricane coverage. Your landlord’s policy will pay for damage to the structure, but it will not cover any damage sustained by your belongings, like that couch we mentioned or any items you had stored outside of your apartment such as a bike. Whether you rent or own a condo or home, hurricane and windstorm insurance is something to consider.

Another item that your insurance should cover if you live in a hurricane-prone area is something called additional living expenses (ALE). Many policies have this as part of their basic coverage, but it’s worth checking. This part of your insurance would cover the costs you would have if your home was unlivable, such as hotel or restaurant costs, storage costs or even pet boarding. Keep all your receipts from your hurricane-caused situation so you can submit them for payment to your insurer.

The takeaway

Hurricane insurance is not for everyone, but if you live where hurricanes are common, it can be a life-saver.

  • Hurricane insurance covers damage caused by heavy winds, hail and other hurricane-caused phenomena (except flooding).
  • It may protect both your property and your belongings.
  • This coverage makes sense even for renters and condo owners.
  • It kicks in after a hurricane deductible, which is a percentage of your home’s value.
  • Some hurricane and flood coverage includes a waiting period after you purchase a policy, so you would be out of luck if you waited until the last moment to buy a policy.

Anyone living in an eastern coastal state or Gulf state should consider supplemental insurance for hurricanes. Although it may cost more to have this coverage, with today’s volatile weather patterns, it could enable you to rebuild or repair damage from a catastrophic event.

Hurricane coverage policies take into account damage caused by both wind and rainstorms, as well as water damage — although you may need an additional flood insurance policy to fully deal with the outcomes of a serious hurricane. Most policies require a hurricane deductible, which is a percentage of your home’s value. This can increase your costs significantly, but having the coverage may be worth it if another Katrina-level storm occurs.

Mary Van Keuren

After 30 years as a writer and editor in academia, Mary now writes full-time for the insurance and finance industries. Her work has appeared on Reviews.com, TheSimpleDollar.com and Bankrate.com, as well as other consumer-focused websites.

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