These 5 Things Aren’t Covered by Home Insurance: Prepare for Hurricane Season

You buy insurance to protect against hurricanes. However, home insurance doesn’t cover everything. Unfortunately, many homeowners don’t realize how unprotected they are until it’s too late.

Today, we’re highlighting five things that aren’t covered by homeowners insurance to help you prepare for hurricane season.

Flood Damage & Storm Surges

Hurricanes don’t just bring heavy winds. They also bring heavy rains and a storm surge.

If you live near the coast, a storm surge could raise water five to 20 feet above its normal range, submerging your home.

Even if you don’t live near the coast, heavy rain could cause local flooding.

Unfortunately, homeowners insurance doesn’t cover either of these two types of damage. A standard homeowners insurance policy doesn’t cover flood damage or storm surge damage:

• A standard homeowners insurance policy covers water damage – like burst pipes – but not flood damage.
• What is “flood” damage? Essentially, if waters rise and damage your home, it’s considered flood damage.
• When a hurricane causes a storm surge, it causes localized flooding near coastal areas and waterways. Insurance doesn’t cover this type of flood damage.
• When a hurricane causes heavy rain, it can also create localized flooding. Insurance covers damage caused by the rain itself (as it falls from the sky). However, it doesn’t cover damage caused by the rain as it accumulates and floods.

Yes, these coverages can be confusing. And yes, many insurance disputes occur because of the source of the water damage to a home. Was it caused by rain? Wind? Flood damage? Sewer backups? Insurers need to determine the source of damage to apply coverage.

High-Value Items (Items Over $1,000)

You might assume insurance covers your home and all possessions inside your home. However, that’s not always the case.

Instead, your insurance policy’s personal possession coverage usually has a limit. That limit is typically between $1,000 to $2,500 per item, depending on the type of item.

Personal possession coverage also has an overall limit – typically 25% to 75% of your dwelling coverage. If your home has $300,000 worth of dwelling coverage, for example, then you might have $150,000 worth of personal possession coverage.

After a hurricane, however, your insurer doesn’t just cut you a blank check for the full value of all your items. Instead, you may or may not receive fair value for the items in your home:

1. Your insurance policy likely has a per-item limit. It may not cover items worth over $1,000, for example, without an endorsement. If you lost a $5,000 engagement ring in a hurricane, for example, then your insurance may only pay your maximum per-item limit ($1,000) instead of the true value of the item.
2. Your insurer calculates compensation based on actual cash value (ACV) or replacement cost value. ACV is the default option, although some spend extra for replacement cost policies. Check your policy to understand what’s covered. It will make a big difference in how much you receive for your damaged items after a loss.
3. Different items and different categories. Check your insurance policy for specific item types, restrictions, and losses. Your insurer may have a per-item limit of $2,500 for stolen firearms and jewelry, for example. However, that per-item limit may drop to $1,500 for items destroyed during a hurricane.
4. To ensure coverage for high-value items, add specialized coverage to your policy. Contact your insurer and, if necessary, order an appraisal for your high-value items. Generally, you’ll only pay a few extra dollars per month to cover your costliest items.
5. It’s difficult to receive compensation for items you can’t prove you owned. If you don’t have receipts, photos, or documented evidence, then your insurer could deny or reduce your claim.

Landslide & Mudflow Damage

A hurricane could directly cause landslides and mudflows.

Unfortunately, a standard insurance policy covers neither landslides nor mudflows. Landslides are covered under earthquake insurance, while mudflows are covered under flood damage.

Insurance doesn’t cover landslides because they’re considered an earth movement – similar to an earthquake. Generally, hurricane-prone regions and earthquake-prone regions don’t overlap. However, homeowners in California and certain other locations sometimes buy earthquake insurance for peace of mind.

Insurance doesn’t cover mudflows because they’re considered a type of flood damage. Unless you have extra coverage through FEMA’s National Flood Insurance Program (NFIP), your insurer won’t cover the cost of repairing or replacing mud damage to your property.

Heavy Winds (In Certain Coastal Areas)

If you live in the southeastern United States, then insurance may not automatically cover damage caused by heavy winds. Instead, you may need to buy extra windstorm insurance.

Also known as wind and hail coverage, windstorm insurance covers hurricanes, tornadoes, and other heavy wind events.

If you don’t have windstorm insurance, then – you guessed it – insurance won’t cover the cost of repairing your property after heavy winds. That’s why most homeowners in coastal areas and hurricane-prone regions have windstorm insurance.

In fact, if you have a mortgage, then your lender will often require you to carry windstorm insurance.

Check your windstorm insurance deductible. Some policies have a named storm deductible. If a hurricane has been named, then you pay a different deductible – say, 2.5% to 7.5% of your home’s value instead of a flat fee of $2,500. In most cases, that means paying a much higher deductible after a named hurricane.

Damage Within 30 Days of Buying Coverage

Generally, insurers don’t sell homeowners insurance policies within 24 to 48 hours of a big storm.

The NFIP, meanwhile, requires a 30-day waiting period on flood insurance policies.

You can’t simply buy flood insurance in the days leading up to a named hurricane, then cancel it afterwards. However, you can buy flood insurance at any time – it just won’t take effect if a named storm hits your property within 30 days of policy activation.

If you’re preparing for hurricane season, be sure to prepare well in advance.

By understanding gaps in your coverage, you can choose whether to fill those gaps or accept the risk.

Check your policy before hurricane season to avoid being underinsured.

Stephanie Corona

Stephanie is a property insurance claim expert with over 20 years of experience working as an insurance adjuster, expert witness, appraiser and umpire. She is passionate about sharing her expertise, knowledge, tips and training to help both property owners and Public Adjusters in their pursuit of effectively managing claims and recovering the claim settlement they deserve after a loss.