The Insurance Information Institute (iii.org) suggests the following steps to prepare for a hurricane and other disasters:
- Review Your Insurance Coverage
The time to review your insurance policy is before you have to file a claim. You should have enough insurance to rebuild your home and replace all of its contents.
- Make sure you have enough insurance to rebuild your home. Look into getting an extended replacement policy for the structure of your home or a guaranteed replacement cost policy, if your insurer offers one. Extended replacement cost coverage generally pays 20 to 25 percent more than the policy limit to repair or replace a damaged home. A guaranteed replacement cost policy pays to rebuild your home regardless of cost. Both are designed to protect you in the event that after a major disaster the high demand for building contractors and materials forces up the normal cost of reconstruction.
- Ask about replacement cost coverage for your belongings. When insuring your possessions, you have two coverage choices. One is actual cash value (ACV), which replaces your belongings less depreciation. The other is replacement cost coverage, which replaces your property at today’s value—without a deduction for depreciation. A replacement cost policy costs about 10 percent more than an ACV policy, but is a much better value in the long run.
- Find out how much coverage you have for Additional Living Expenses (ALE). If you cannot live in your home because of damage due to an insured loss, additional living expenses coverage pays for the added costs of living away from home—such as hotel bills and restaurant meals—while your house is being repaired or rebuilt. If you rent out part of your home, ALE also replaces lost income for the time you are not able to collect rent. Many policies provide ALE coverage for about 20 percent of the amount of insurance you have on your house and for a specified time period. Additional ALE coverage is generally available for an extra premium. If you have any questions about ALE, talk to your insurance professional now.
- Consider flood insurance. Flood and/or storm surge-caused damage to a home is not covered by standard homeowners or renters insurance policies. It may take as long as 30 days for a flood insurance policy to go into effect, so it’s important to secure your coverage as soon as possible. We have many options for you at D.F. Dwyer Insurance, learn more here.
- Understand your deductible. Separate hurricane deductibles are incorporated into many homeowners insurance policies issued in the 18 coastal states from Maine to Texas. A deductible is the amount of money policyholders pay out-of-pocket before their insurance coverage kicks in. It is important to understand whether a hurricane deductible applies to your policy and how it will affect your insurance claim. Hurricane deductibles apply solely to damage caused by hurricanes, and typically vary from 1 percent to 5 percent of the insured value of a home. For example, a policyholder whose home is insured for $200,000 with a 2 percent hurricane deductible would have to pay the first $4,000 needed to repair the home themselves if the loss were caused by a hurricane. Whether a hurricane deductible applies to a claim depends on the specific “trigger,” and the criteria activating the trigger are spelled out in the policy. These triggers vary by state and insurer and usually apply when the National Weather Service (NWS) officially declares a storm to be a hurricane. Call us at 401-846-9629 to learn exactly how your particular hurricane deductible works.
- If you are a renter, get renters insurance. Renters insurance will provide coverage for your personal belongings, as well cover the cost of additional living expenses if your rental property is destroyed by a hurricane or other insured disaster. Renters should also consider purchasing flood insurance.
- Create A Home Inventory
A home inventory is a list of your personal possessions together with information about their estimated financial value. The I.I.I.’s Know Your Stuff– Home Inventory software and mobile app make creating a home inventory simple and easy. An updated home inventory will make filing a claim, applying for disaster aid or substantiating financial losses for tax purposes simpler should a disaster strike. And, of course, an up-to-date home inventory helps you to purchase the right amount of insurance.
- Have An Evacuation Plan In Place
Know where you will go, and what you will take, if authorities tell you to evacuate. View this video for quick reference and also see our post on Evacuation Planning For Your Family & Pets.
- Protect Your Property
Hurricane-proof your home by keeping wind and water out; secure roof shingles and seal any openings, cracks or holes. We recommend the I.I.I.’s Know Your Plan App as a helpful checklist / preparation tool.
*Article content courtesy Insurance Information Institute- iii.org