When it comes to bad weather, your homeowners policy or business insurance should cover the damages incurred. However, many may have to pay for property damages out of their own pockets. Either they did not have Flood Insurance or Earthquake Insurance, or they had a high Windstorm Deductible applied for hurricanes.
Have you taken the time to read your insurance policies? Do you know if your property is covered against damages arising from natural disasters like floods, earthquakes, and hurricanes? It may be a good time to take a look or give us a call to find out…
You don’t have to live near a body of water to be at risk for a flood. In fact. 25% of all flood claims occur in areas not identified as high-risk flood zones. While there are many ways that water can damage your property, flood is defined by FEMA as, “an excess of water on land that is normally dry.” Floods can be due to an overflow or rising of a body of water, runoff, mud flow or a collapse of land near a body of water. While a homeowners insurance policy may cover damage that occurred before the water comes in contact with the ground, only a flood insurance policy will cover damages due to flooding. The Federal Government runs the National Flood Insurance Program (NFIP) through FEMA and the Department of Homeland Security.
In terms of business insurance, insuring commercial property from flood damages can be achieved by two ways: within the package policy that covers the building, or through obtaining a National Flood Insurance Policy (NFIP). Obtaining flood insurance within the package policy is generally less expensive but this option may not be available if your building is located in a high-risk flood zone (generally zones A or V). Also worth noting is that the deductible in package policies can vary considerably while national flood insurance offers a deductible as low as $500. Remember, flooding is specifically not covered unless the coverage is purchased separately!
*Keep in mind that when purchasing flood insurance, do not wait until the last minute as there is a 30 day waiting period for coverage.
Standard homeowners insurance or business insurance policies will not include earthquake protection. If you want your property covered, you will have to purchase a separate policy or endorsement. Check with your insurer about how they define an earthquake and if your policy covers related losses, such as water or fire damage triggered by such an event.
**For Coop or Condominium Unit-Owners- it is also worth noting that you can ask your insurer for earthquake coverage that would pay for losses if the building is damaged and you are asked to contribute to the cost of repair.
Hurricane or Windstorm Insurance-
According to the Insurance Information Institute, standard homeowners and business insurance policies should cover wind damage from hurricanes. Many insurers impose a “windstorm deductible,” which can be a flat amount, or can be as high as 5% of the Total Insured Value of the property. A windstorm deductible would be applied if winds exceed 75 miles per hour and are considered hurricane conditions by the National Weather Service or National Hurricane Center. Do you know what your windstorm deductible is?
Assess if it is worth it for you or your business to purchase additional flood, or earthquake coverage and review your windstorm deductible. Contact us any time with questions.