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Superstorm insurance

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The term “superstorm” was coined in 1993 by The National Weather Service after one of the most intense cyclones ever witnessed in the eastern US. This term began being used to describe unusually large and destructive storms that lack another specific meteorological classification. Superstorms typically only occur once every few decades.

There are some key differences between superstorms and hurricanes. For starters, hurricanes are much more common. While superstorms are more vague in their classification, a storm must meet certain specific parameters to be classified as a hurricane. 

Hurricanes also tend to be tropical cyclones, which are smaller than superstorms (classified as extratropical cyclones). Areas prone to hurricanes often require specific hurricane insurance to cover hurricane-related damage.

In 2012, at a total cost of $65 billion in damages, Superstorm Sandy was the second-costly hurricane in United States history, behind Hurricane Katrina’s $108 billion in damages. When shopping for home insurance and deciding what coverage is needed, it is important to consider that additional coverage for superstorms may be a worthy investment

Home insurance for superstorms

Storms like Sandy brought to light that insurance companies and homeowners were not prepared for the level of damages and loss that are often associated with superstorms.

Michael Conley, an insurance recovery attorney with law firm Offit Kurman in Philadelphia, says homeowners insurance is so complicated, policyholders should be having a frank discussion with their insurance agents.

“The biggest mistake policyholders make is not understanding the actual scope of the coverage they purchased, but instead relying upon representations as to the coverage,” he said. “Policyholders need to make sure that they understand exactly what will be covered for certain causes of loss, such as storm damage or floods. They also need to understand the difference between replacement cost and actual cash value policies.”

If you live in an area prone to storms like superstorms, your main risks are water and wind. Windstorm and flood insurance, among others, are critical to protecting you from financial loss. 

Flood coverage

Most standard homeowners insurance policies have flood exclusions. This means that if your home is damaged in any way by flooding, even when caused by a superstorm, the damages may not be covered. 

For example, let’s assume a superstorm occurs and your home has major storm damage. The entire first floor of your home is flooded now from intense superstorm rain. 

Under a standard policy or a policy that contains flood exclusions, those damages will likely not be covered and you’ll be stuck paying for those repairs out of pocket. To cover those types of damages, you will need flood insurance. 

Wind/windstorm coverage

While wind damage is covered under many standard policies, in some states where hurricanes and superstorms are more likely, these types of damages are excluded. If wind and windstorm damage is not covered under your policy, it may be necessary to purchase separate windstorm insurance. The key distinction with windstorm insurance is that it covers high wind damage from any type of storm. That is critical since superstorms are in a vague classification of their own. 

Without this insurance coverage, if a superstorm hits your area and your roof is suddenly missing, you may not be covered. Paying for that type of repair may be a major hit to your budget. It is important to note that if your policy includes tornado insurance, you may already be covered for flooding and windstorm damage, but only if there is a confirmed tornado as the cause of loss. 

Hail coverage

With many storms, including superstorms, hail is a high possibility. Be sure that your policy includes coverage for hail damage. Insurance companies in some areas, like hurricane-prone areas, require a separate deductible for wind and hail damage. 

Filing a weather-related claim

If you have all the necessary coverages and your home has just been damaged by a superstorm, the next step is to file a claim with your insurance company. It is important to do this as soon as possible after the damaging incident has occurred to ensure your claim is handled in a timely and accurate manner. Here are some general steps to follow:

  1. The first thing to do is to contact your insurance company to notify them of the damage. They will advise you of all steps in the claim process. If you are not clear on any part of the process, ask for clarification. It is important that you understand what the process will entail and what is needed from you. 
  2. Prepare a list of all damages, including as many pictures as possible to verify the scope of damage. If you have receipts for the items damaged, include those as well. 
  3. Fill out all claim forms promptly. Your home was not likely the only one damaged by this superstorm which means the insurance companies may be bombarded with claims. The sooner you can get yours in for processing, the less likely you are to experience major delays. 
  4. Accommodate the insurance adjuster’s visit. As part of the claims process, the insurance company will send an adjuster to assess the damage and possibly ask you some questions. This is also the time to provide them a copy of your list of damages, pictures, and receipts. If you can provide an estimate for repairs from a contractor or two, do this as soon as possible 
  5. Be patient, but don’t hesitate to ask questions. The claims process can take some time and there may be things you need to repair temporarily until the claim is approved. Document any repairs you make, whether permanent or temporary and save your receipts for reimbursement. 
  6. If the insurance estimate for repairs falls drastically short of what your contractor has projected, there is room to negotiate the accuracy of your insurance estimate. This can be done with a supplemental estimate or by hiring a public adjuster to advocate on your behalf.  

Types of damages that may be covered

With the right coverages in place, your insurance policy should cover a large percentage of damages done to your property. This list includes some of the weather-related damages that may be covered:

  • Hail damage – this could include damage to your roof, siding, windows, or other personal property. 
  • Lightning damage – this could include damage to wiring, appliances, telephone lines, or other things affected by lightning. 
  • Flood damage – this includes any damage caused to the structure and property ruined or damaged by the flooding.
  • Wind damage – this includes things like roof damage due to high wind, downed trees or tree limbs that come down due to wind that damage the property, etc. 

Liability coverage to consider

Did you know that if someone gets injured while on your property, you may be held liable and have to pay for any damages owed to them? For example, say your deck sustained some weather-related damages that you have not yet had fixed. A broken deck board causes a visitor to fall and break their leg. They decide to sue you for their damages. That is where liability coverage comes into play. Most standard homeowners policies include some level of liability coverage. 

Liability insurance covers bodily injury or property damage lawsuits for humans and pets. These limits start at around $100,000 but additional liability coverage can be purchased if needed. 

If more coverage is needed, you might consider an umbrella policy that includes additional coverage with higher coverage limits and also covers things like libel and slander which a standard policy does not. 

The takeaway

  • Superstorms, though similar to hurricanes, are more widespread in the extent of damage and less frequent
  • Superstorm insurance is not a specific type of insurance policy. Instead, it is a combination of coverages and policies to ensure you are insured in the event a superstorm occurs. 
  • Follow some basic insurance claim filing steps to ensure a smooth claim process.
  • Liability coverage is an important part of homeowners insurance even when it comes to weather-related damages. 

Though superstorms are not a frequent occurrence, they often leave a significant path of damage when they do occur. Maintaining comprehensive homeowners insurance can mean the difference between financial hardship or quick repairs. 

Depending on where you live, you may need several different types of insurance and coverages to be sufficiently covered in the event of a superstorm. Speak with your agent to be sure you have what you need to be covered from a superstorm.

Ashlee Tilford

Ashlee is an MBA business professional by day and a dynamic freelance writer by night. Covering industries like banking, finance, and health & wellness, her work has been published on sites like bankrate.com, thesimpledollar.com, interest.com, womens-health.com and more. Ashlee specializes in personal finance and is passionate about helping others achieve greater financial freedom.

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