What you don’t know about your homeowners insurance may cost you when disaster strikes.
According to the Insurance Information Institute, you can count on the majority of homeowners’ policies to cover the structure of your home, personal property, detached units and any living expenses. Everything else may require special policies or may be excluded.
Take natural disasters like hurricanes. To limit their exposure to catastrophic losses from these events, insurers offer deductible plans that, depending on the state, will determine the level of hurricane, windstorm or wind/hail deductibles.
The III says there are two kinds of wind damage deductibles: hurricane, which covers just damage from hurricanes, and wind/hail, which exclusively covers wind damage. In general, these are percentage deductibles, which can range from 1% to 5% of a home’s insured value.
So if your house is insured for $300,000 and has a 5% deductible, you’re responsible for the first $15,000 of your claim. You’ll find details of hurricane deductibles on the declarations page of your homeowners policy.
Believe it or not, while the National Flood Insurance Program reports that 90% of all natural disasters involve flooding, you won’t find flood coverage in standard homeowners’ or renters’ policies. You’ll need a separate policy for that from the Federal Emergency Management Agency’s National Flood Insurance Program and/or a few private insurers.
NFIP offers up to $250,000 to cover your home’s structure and $100,000 for your personal property. According to FEMA, it’s not just homes in flood zones at risk. In fact, more than 20% of flood claims come from properties outside high-risk federal flood zones.
Need more incentive to do your homework instead of skimming your policies? NFIP flood insurance policies may cover up to $1,000 spent to protect your property like sandbags or water pumps. The III advises homeowners to keep copies of all receipts and time spent to do the work so it’s easy to ask for reimbursement.