Insurance: Preparing for a busy hurricane season
“Batten down the hatches,” said Ed Leefeldt in CBSNews.com. Hurricane season is here, and it’s expected to be a wild one. The National Oceanic and Atmospheric Administration is predicting an “above normal” Atlantic hurricane season, which runs from June to the end of November, with between 11 and 17 “named storms.” Coastal homeowners should “act while the sun is still shining.” If you don’t already have flood insurance, your first step should be to buy some; it isn’t included in standard homeowners’ or rental policies. It also comes with a 30-day waiting period, so flood policies “can’t be purchased once a storm is already in the Atlantic or Gulf.” The worst storm damage often comes from flooding. Yet only 12 percent of American homeowners own flood insurance, even though property owners are 26 times more likely to suffer flood damage than fire damage over the course of a 30-year mortgage.
This is also a good time to review your homeowner’s insurance, said Ann Carrns in The New York Times. “Most policies for coastal properties now have separate deductibles for damage caused by hurricanes,” usually based on a percentage of the home’s insured value. So, for a $350,000 house, a 5 percent hurricane deductible would be $17,500. “For that reason, consumers should be cautious about increasing hurricane deductibles to lower their insurance premiums.” You do not, however, have to pay the deductible in cash. If you file a claim, the insurance company will subtract the deductible from whatever it pays out. But “while you don’t necessarily have to pay the deductible up front, you may have to come up with extra money to make repairs.” Several states, including Alabama, Mississippi, and South Carolina, offer tax deductions for money set aside in special catastrophe savings accounts, which can be used to meet deductibles.
Preparation isn’t just for hurricane “newbies,” said Lauren Walck in the Gulfport, Miss., Sun Herald. “People who bought a house a decade or more ago may not have updated their insurance policy to reflect its current value.” Now is the time to get everything up to date. In the event of an evacuation, your “go bag” should include everything you need to file an insurance claim, said Kelli Grant in CNBC.com. That includes copies of your insurance policies and contact information for your insurer and agent, as well as a recent home inventory. “If you have time, take a few pictures of your home ahead of your evacuation.” These “before” pictures can help streamline the insurance claims process. “Ideally, consumers should have important documents already gathered and stored in a watertight, fire-protected safe as part of a disaster preparedness plan.”