We’re one week into hurricane season and already have our first named storm, Tropical Storm Colin. It hit the Florida panhandle on Monday with 50 mile per hour winds and 2 to 7 inches of rain resulting in flooding across much of the state. Tropical Storm Colin serves as a great reminder for Texas homeowners to take a few minutes to perform an insurance review that’s focused on hurricanes and the type of claims that occur. To help with that, let’s delineate who and what needs to be reviewed by tiers and the type of coverage.
Tiers: Most home and condo insurance companies assign tier numbers to Texas counties; Tier 1 areas are coastal counties, or areas of coastal counties, such as Harris, Nueces, and Cameron. They front the Gulf of Mexico. Tier 2 typically refers to those counties that are adjacent to the coastal counties, and Tier 3 is everything after that. Due to Harris County’s size, it’s divided into both Tier 1 and 2 by some insurance companies. What’s important to note about whatever area your home is in, is how it impacts your insurance coverage.
Coverage: The types of coverage people with homes in Tier 1 and Tier 2 need to review include wind, hurricane or named storm, and flood. It is possible for a homeowner in a Tier 1 area to have a home policy, a flood policy and even a wind policy depending on the location of their home. Most homeowners in a Tier 2 area will probably have a home policy that includes hurricane and wind coverage, and maybe a flood policy if their home is in a mandatory zone.
The things I suggest you review are your wind and hurricane coverage, flood coverage, and your deductibles.
- Confirm whether your home policy covers wind and hurricane or names storms.
- If you have a separate wind policy, confirm whether it covers only the home (structure) or also includes coverage for contents or personal property. Both are really important for homes in Tier 1.
- If you have a flood policy, which also includes tidal surge, confirm whether it covers the home only or also includes the contents too. I recommend both for homes located in Tiers 1 and 2.
- Review your deductibles and set aside cash reserves to cover them. Don’t count on Federal disaster relief funds. Even if they are available and you qualify, they are a loan that has to be paid back.
- Do you have items that aren’t scheduled but should be? This includes jewelry, artwork, musical instruments, silverware, etc.
- If you have a boat or other watercraft that are moored or stored at a marina, review the amount of coverage to determine if it’s enough to cover a total loss.
- Confirm whether you have comprehensive coverage on your car insurance policy. This covers damage caused by winds and flooding.
For Texas homeowners in Tier 3 areas further inland, now is a great time to determine if you need flood insurance. While we’ve had a pretty wet spring with widespread flooding in Corpus Christi, Houston, and along the Brazos River, it could be much worse and more widespread if a tropical storm dropped over 8 inches of rain on us San Antonio, Austin, or the D/FW area in a few hours.
What do you think? Share your questions, comments,, and other items you think should be reviewed with me on my Facebook, Google +, and LinkedIn pages. I’d love to hear from you!