It’s been a challenging summer. Hurricanes, earthquakes, forest fires, mudslides. Almost all portions of America have been affected by a natural disaster at some point this year.





Any natural disaster is a scary thing for homeowners, who worry about losing one of the largest investments of their lifetime. Of course, your safety is paramount, items can be replaced but lives cannot.





While all of that is certainly true, replacing those things isn’t as easy as it may sound when it comes to insurance coverage and natural disasters. In this case, what you don’t know about your insurance policy may certainly hurt you or, at the least, leave you disappointed.





Coverage with a Standard Policy





 





Most people in the U.S., unless they’ve made other provisions, have a standard homeowners insurance policy. Such a policy will certainly cover some things that can be associated with disasters such as a hurricane or other fierce storm.





For example, it is likely that your standard policy will replace your roof if it is damaged or blows off during a storm. If a tree or other structure falls on your home, that’ll be covered, too. If debris hits a window and breaks it, you’re covered. If your home catches fire or is struck by lightning, chances are your homeowner's insurance will cover the damage.





But, especially in hurricanes, water is a major problem and often the cause of damage, so unless you were mandated by U.S. law to purchase flood insurance because you’re in a floodplain, you might be out of luck where flooding and water damage is concerned.





Flood Insurance





 





If you purchased a home in a high-risk flood area and you have a mortgage, your mortgage company demanded you have insurance coverage for scenarios that are caused when the water rises. So, you’re safe.





But in the case of many of this year’s big storms, those outside of high-risk floodplains were affected by excess water, and it’s those homeowners who may just be out of luck.





If the individuals described above – those outside of areas where flood insurance is mandatory - didn’t purchase a separate flood policy, they wouldn't be collecting any insurance money, even if the river’s waters reached their living room or the surging ocean destroyed their entire home. It’s a sad but true reality for many impacted by storms like Hurricanes Harvey and Irma.





The U.S. government has been the primary flood insurance provider since the National Flood Insurance Program was formed in 1968. But you don’t buy the policy from the government. You purchase it from your insurance broker, who is a representative for the government program. Once you buy flood insurance, there’s a 30-day waiting period before it takes effect; hence, you can’t buy it a few days before a hurricane is set to arrive.





These policies, when tapped after a flood, will provide funds for both home repair and replacement of personal property. Currently, more homeowners in Florida take part in this program than in any other state including Texas and California. Some 19 percent of Floridians have flood insurance, which the government says is admirable, but they admit that the number should be much higher.





These policies, when tapped after a flood, will provide funds for both home repair and replacement of personal property. Currently, more homeowners in Florida take part in this program than in any other state including Texas and California. Some 19 percent of Floridians have flood insurance, which the government says is admirable, but they admit that the number should be much higher.





Wind Damage





  





Hurricanes come with the wind as well as flooding but, unfortunately, some policies include a tricky clause which states that if a “covered” and “non-covered” event happen at the same time – like wind damage and flooding – neither is covered. Fair? Most homeowners don’t think so





Also, in some coastal areas, homeowners need to purchase a separate insurance rider for wind damage, but unless the insurance broker mentions it, most homeowners don’t know enough about insurance coverage to ask about it. Then, when wind damage occurs, they’re in for an unpleasant surprise.





Rebuilding





  





If the worst occurs and a home is unsalvageable, rebuilding – even when insurance coverage is present – can become a huge hassle and most homeowners will find that few policies will cover their costs in entirety, especially if they want to rebuild their older home to higher code standards.





Also, during the months following a storm that damaged many homes in a particular area, rebuilding costs sky-rocket and homeowners find themselves paying exorbitant prices for necessary services to rebuild.





Insurance Changes





  





Sadly, the insurance industry often responds to catastrophic events by making moves that negatively affect consumers. After Katrina in 2005, many insurance companies began charging an extremely high “hurricane deductible,” which protected their bottom line profits but caused consumers to have to come out of pocket after being impacted by storms.





Hence, if you’re in an area that “could” be affected by natural disasters, speak to your insurance agent or – if you’re in the process of searching for a home – your real estate agent, to determine which policies/riders you’ll need to protect your precious home.