Making Hurricane Readiness Improvements Your Insurance Company Will Love

Homeowners’ insurance premiums have skyrocketed in Florida since the disastrous hurricane seasons of 2004 and 2005.  Property owners in the state are desperate to save money anywhere they can.  Though some recent laws and regulations have brought the price of hurricane and flood insurance down slightly from their all-time high levels in 2006 for many in hurricane-prone areas, you may be able to make a serious dent in your policy price by making some improvements to keep the wind and water damage at a minimum.

Perhaps the first and easiest thing you can do is to make an appointment with your insurance agent and find out what, according to state law, you can do to lower your premiums and keep you in good standing with your insurer.  Usually they’ll be able to tell you by what criteria your risk has been assessed.  Even if you simply live somewhere that is always getting smacked with hurricanes, you can make improvements that will, at least, put your home in the category of well-fortified structures in a high-risk area.

It is also possible that making such improvements might keep your policy from being dropped, as so many are today.  The rolls of the Citizens’ Property Insurance Corporation  – the state-owned insurer of last resort – have been swelling in recent years, and will soon represent a majority of policies in some coastal areas, since the traditional private insurers have pulled out.

Of the most common repairs to make are installing better roof tiles/shingles and an additional water barrier beneath them.  This not only decreases the chance your roof will actually fly off but also gives it a better chance of keeping the water out if those shingles do still come off.

Other common improvements include trimming tree limbs away from your home.  Some people even go so far as to remove any large trees that are near the house, replanting with dwarf trees gardens or shrubs.  Gardens planted with bulbs and tubers, or any other plant with underground storage structures, will survive being completely defoliated because it’s designed to come back from below ground. 

Garage doors are very often not up to the task of surviving some of the straight-line winds that accompany hurricanes and the massive thunderstorms they spawn.  When these winds punch the doors in, water can seep in the garage, and attached units are especially prone to allowing flood damage into the house.

After a hurricane hits is not the time to find out if your foundation is up to snuff.  Those with houses on slab-type foundations may have shifted over time or with settling.  Such homes ought to be checked to make sure they are well attached to their foundations before the hurricane season begins.  They are your responsibility to maintain and such damage to your home is not always covered by flood or regular homeowners’ coverage.

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Assessing Your Hurricane and Flood Insurance Coverage

There’s nothing more heartbreaking and financially distressing than finding out your property insurance was inadequate to cover you in the event of hurricane or flood damage.  Take some time before the season starts to sit down with your insurance agent and re-evaluate your coverage for the coming season.  There’s no better time like the present, since changes you make will take at least a month to become final in most cases.

It is estimated that over half the homeowners in America have inadequate property insurance to cover the current cost of replacing their home in case of a catastrophic loss.  Most of the time, the coverage is just enough to protect your mortgage company’s investment. Your mortgage company is only interested in protecting their investment, so actually having somewhere to live isn’t their concern.  It is always a good idea to meet with your agent at least once a year to evaluate your changing insurance needs.

Many homeowners insurance policies also contain a little know or understood provision known as the “co-insurance” clause. This provision allows the insurer to penalize you for not having enough insurance. The penalty, believe it or not, is to reduce the amount that they do have to pay you for a claim. It’s a double whammy. You don’t have enough insurance to begin with, and because of that, the insurer can pay you even less than what you have.

Florida has had a very tough time with hurricane-related insurance problems in recent years.  Not only were the hurricanes of 2004-05 devastating to many people who live here, a great many insurers had their “rainy day funds” decimated.  Though many property insurance companies that were going to pull out of the state were encouraged to stay with concessions made at the state level, those who stayed were allowed to pull in extra premiums for other types of policies such as auto and sinkhole coverage.

Many people believe their homeowners insurance also covers “flood” damage, though this couldn’t be further from the truth.  While your homeowners policy may cover certain types of hurricane related damage, it probably does not cover flooding. Flooding is a broad term that encompasses virtually any damage caused by water, unless the water penetrated your home through a breach caused by the storm. For example, damage caused by rain coming in through a hole in your roof that was caused by a hurricane is covered. On the other hand, most insurers will deny coverage for water damage caused by rain that was blown into your attic through undamaged soffets.

You can obtain a separate flood insurance policy through the federal government’s insurance program.  While your insurance company may be an agent of this governmental plan, and my offer upgrades to a policy that covers flood damage, it all comes from the feds.

When it comes to hurricane damage, there are several things you can do to decrease your additional premiums.  This might involve cutting trees away from your buildings or shoring up the foundation.  Your agent should be able to provide you with a list of improvements you can make to save some money, in accordance with the recently introduced My Safe Florida Home program.

When storms strike, you’ll feel a lot better riding them out if you know you’ll be covered no matter the damage.  Make an appointment with your property insurance agent and make it a point to discuss your readiness for the upcoming hurricane season.  While no one wants to pay more for their insurance, it does you no good if it’s inadequate when you need it.

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Federal Flood Insurance Particulars for Florida Homeowners

By federal law, all flood insurance is issued by the Federal Government though their representatives in the private insurance industry and directly from states.  Over 80% of Florida’s residents and businesses are situated along the coastlines, in danger of being inundated by the storm surge of a powerful hurricane.  However, only 35% of residences are actually covered by flood insurance.  Federal emergency funds won’t be enough to rebuild your home after a damaging hurricane.

The Florida Division of Emergency Management describes federal flood insurance as, “pre-disaster flood mitigation and insurance protection program designed to reduce the exalting cost of disasters.”  In Florida, state law requires communities to implement federal regulations regarding land use planning and flood plain management when they agree to be served by the flood insurance that is necessarily the only game in town.  The Federal Emergency Management Administration (FEMA) compiles the risk assessment.

In fact, over 40% of the flood insurance held in the nation is in Florida, accounting for the nearly $315 billion dollars of investment the federal government has in the stability of Florida.

Practically, the Federal Insurance and Mitigation Administration (the other FIMA) makes insurance available.  Under emergency program levels only, the maximum allowable payout for a single family home is $35,000 for the structure and $10,000 for the contents inside.  Business properties, including inventory and equipment as well as structures are insured for $100,000 each.

When additional insurance is purchased through FEMA, you may insure your home for up to $250,000 and your stuff for $100,000.  Businesses may carry half a million dollars worth of insurance on property and structures.  Of course, the extra insurance is going to cost you.  Floridians alone spent nearly $250 million dollars in 2006 on their flood insurance.

Incredibly, the maps drawn up are not used to determine your rate.  The federal program charges everyone in an area the same, so modest homes inland disproportionately carry the load of high-priced beachfront property that have in the last decade paid out nearly six times as much as they’ve taken in.

Most people get their flood coverage as part of their Florida homeowners insurance.  Your insurance company representative should be able to answer any questions you may have about the flood coverage an agent of the federal program as well as their own company. 

Be sure to ask your agent if there’s anything you can do as a homeowner to reduce your risk of flood damage that would result in a rate discount. 

As far as protecting yourself should you actually have flood damage to claim, be sure you have plenty of pictures and an inventory list of the things you own and as well as the condition of your house and yard.  Check with your agent to make sure you’re protected for the cost of actually replacing your valuables with something current, not just their depreciated value.

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Insurance Company Tactics and Your Hurricane Damage Claim

You’ve already lost your home.  If you rent or own your own site-built or manufactured home, you are a good candidate for hurricane insurance anywhere in Florida.  The level of coverage you are recommended to carry, and your premiums, are determined by past hurricane activity.  However, no matter how good you think your insurance company or policy is, you should prepare for resistance by your property insurer to cover what you think should be replaced in the event of hurricane damage.

Perhaps the most difficult thing people have had to deal with in the last few years is the refusal of many insurance companies to pay for water damage that the insurance adjusters are increasingly blaming as the cause of your hurricane damage, rather than the winds that blew off your roof and toppled your trees.

Insurance companies are in the business of making money, so it is not in the best interest of adjusters to be generous.  Be sure as you go into a hurricane season that you have an up-to-date and accurate record of your belongings.  This should include fresh pictures of your property taken each year.  If the worst should happen, you’ll want your insurance company to know that you’re prepared to restore your home and property to its original condition.

Even if your expenses are already high, be prepared to ask your insurance agent about sewage backup, inflations costs, changes to your home or family structure, living expenses and additional flood insurance when you have your yearly review of your property and hurricane insurance.  Even renters that live on upper floors should inquire about separate flood and hurricane insurance coverage.  You should also consider making sure your most valuable items, such as electronics and jewelry, are covered in your policy.

When damage occurs, it’s up to you to make sure the adjuster that shows up gets a good look at every aspect of your home and fairly assesses what can be repaired and what must be replaced.  Even if you don’t have flood insurance, interior damage that’s secondary to wind damage may be covered, and this is especially important when drywall becomes moldy.  Flareups of mold spores from a wall that was sodden, even once, can cause serious health problems. Many policies do not cover mold damage, so you need to specifically ask about this coverage.

Another way insurers try to wiggle out of claim monies is to nickel and dime people to death on small issues you might not have thought of.  For instance, water-soaked carpets might be estimated to be cleanable, even when they clearly are not.  If they do replace the carpet, they may not pay for the price of how wide an actual roll of carpet is, leaving you the cost of paying for all the useless remnants.  They are also responsible for the cost of mouldings and carpet backing.  When painting is required, they may try and claim they’re not responsible for all the labour required.  When walls are damaged, they may argue that they don’t need to replace the insulation behind. 

Do not automatically accept an adjuster’s assessment of what is or is not covered. Demand that they provide you with the specific policy language that excludes that item from coverage. If you are still in doubt, consult with an attorney.

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