Hurricanes and Flood Insurance: The Basics
When Do Hurricanes Normally Occur?
The Atlantic Hurricane Season is the portion of the year when hurricanes are more likely to form within the Atlantic Ocean; the season spans from June 1st to November 30th. Each year, during these more active months, damages cost the U.S. hundreds of millions of dollars. According to the National Oceanic and Atmospheric Administration, the 2020 hurricane season will be more active than average. They currently predict between 3 and 6 major hurricanes to hit the East Coast between June and November.
What Damages Can be Covered by Insurance?
Usually, Homeowners Insurance provides coverage for hurricanes, as well as lightning, explosions, wind, theft, and fires. However, even though flooding is a common side effect of hurricanes, it requires a separate insurance policy.
How Can I Protect Against Flooding?
Most flood insurance is controlled through a governmental agency called the Federal Emergency Management Agency (FEMA). Depending on where your property is located, you may want to purchase more or less coverage for flood damages. Properties located in flood zones are more likely to endure flood damage. However, the increase of rainstorms over the last 50 years has resulted in significant ground water retention, which has put all properties at greater risk.
Should I Purchase Coverage Based on the Market Value of My Home?
There is no correlation between your home’s market value and its reconstruction value. You must insure your home for the cost to rebuild it, stick for stick, to the size, appearance and condition it was prior to flood/hurricane damage. The “reconstruction cost” of a home is often higher than its market value for many reasons. Insurance companies rely on data collected from local contractors and vendors for their labor and material costs, so regional differences can affect the calculations (more affluent communities have higher material and labor costs). Insurance companies must also factor in the market-driven increases that will undoubtedly occur when there is a catastrophic event, such as a hurricane, in a geographic region which drives up costs for everyone. Insurance companies fight for resources along with everyone else (labor and materials) and must incur higher costs in order to get your home rebuilt as quickly as possible.
Flooding can be disastrous. It’s better to be prepared than to hope for the best. As always, you can contact one of our agents to discuss your coverge options and receive a FREE QUOTE.
