Sheri and I visited family in Alabama over the Memorial Day weekend. We all watched the weather reports on sub-tropical storm Alberto as it turned north in the Gulf and headed toward the Florida panhandle and Alabama. It serves as an excellent reminder that hurricane season officially begins on Friday, June 1 and runs through the end of November. With that in mind, let’s review home insurance and remember a hurricane or named storm can impact central and north Texas residents as easily as it does our coastal neighbors. Specifically, I’ll address two key areas of your home insurance policy to review along with two other related policies.
Home Insurance Deductibles: There are two home insurance deductibles that pertain to wind, wind and hail and named storm. The deductible associated with hurricanes and tropical storms is the named storm deductible which may also be referred to as the hurricane or tropical cyclone deductible. It’s specified as a percentage of the home’s insured value ranging from 1% for most homeowners in central and north Texas, to 5% for those living along the coast.
If your home has an insured value of $200,000 and you have a 1% named storm deductible, you’ll be responsible for up to $2,000 of any repair to the home caused by wind damage before the policy takes over. For those with a 2% or higher wind / hail deductible, set aside funds to cover the amount of the deductible in the event a named storm strikes our coastline.
If you live in central or north Texas, you should be able to secure a 1% named storm deductible. Most companies will write a 1% deductible; however, a few are defaulting to 2% which doubles the amount you’d pay out of pocket. By the time a hurricane reaches north Texas, it usually has been downgraded to a tropical storm, making it worth your time to check it out!
Wind Insurance: Coastal communities such as Galveston, Corpus Christi, Brownsville, and others may exclude wind coverage from their home insurance policy. In these cases, homeowners need a separate wind policy. Wind coverage, which is like a flood insurance policy, can be written to cover only the home or to cover both the home and your contents or personal property. Having coverage on the home saves you money but not if you lose your roof and all your personal property is lost or severely damaged. Confirm you have enough coverage to rebuild your home and replace your contents.
Flood Insurance: Harvey showed us that even if your home is not located in a mandatory flood zone, it can still be flooded. In fact, most of the people whose homes were flooded, were not located in a mandatory flood zone, and of these, 75% to 85% of affected homeowners didn’t have flood insurance.
Flood insurance covers you whether the home is flooded by storm surge or from rising waters due to the heavy rainfall which accompanies a hurricane or tropical storm. Coverage can be only on the home or both the home and its contents. If you live along the coast or in low lying areas inland, having flood insurance can protect you in ways your home insurance policy won’t. Confirm you have coverage on both and enough to rebuild. If it will take more than $250,000 to replace your home, evaluate excess flood coverage. This can be a financial life saver!
What do you think? Share your questions, comments, experiences and any suggestions you have with me on my Facebook, Google +, and LinkedIn pages. I’d love to hear from you!