AUSTIN, Texas-As Hurricane Patricia moves towards the coast of Mexico and potentially toward an already soaked Gulf Coast, the Property Casualty Insurers Association of America (PCI) encourages residents in the path of the storm to listen to emergency officials and prepare for more rain. Weather forecasters are calling for the system to potentially bring lots of rain to areas that are currently already experiencing flash flooding.
Whether it’s a late season tropical storm or massive hurricane like we are seeing in Mexico, both can rip through neighborhoods and cause significant property damage. Forecasters are predicting Patricia will make landfall this weekend with 200 mph winds excessive rainfall causing historic storm surge in some areas. PCI wants property owners to make sure they know what’s covered under their homeowners policy. It’s important to know what your policy covers in advance of a major claim. This will help in the recovery process and will ensure there are no gaps in coverage. This just might save you from shelling out thousands of dollars in repairs.
Two of the top five most destructive hurricanes, Sandy and Wilma, occurred after October 23 and although they were very different types of storms, together they caused more than $30 billion in insured losses. Both storms were powerful with Wilma resulting in more wind damage, while Sandy producing more widespread flooding.
“Because you never know what to expect from Mother Nature, it’s a good idea to place a phone call to your insurance company or agent and simply ask them what your policy includes and if there are any exclusions,” said Chris Hackett, PCI’s director of personal lines.
“The standard homeowners policy covers damage from a wide variety of events including strong winds caused from a hurricane or tornado. However, the standard policy does not cover flooding. This coverage is purchased through the National Flood insurance Program,” added Hackett.
It’s also important to know how much coverage you have and if the reimbursement for damage is based on the actual cash value or replacement cost. Also tell your agent if you’ve put on an addition or made renovations to your home. The answers to these questions could impact the amount of coverage you should purchase if you want to be certain your home will be rebuilt exactly the way it was before the storm hit,” said Hackett.
Three things you need to know:
1. How do you purchase flood insurance?
You can buy flood insurance through your agent or the National Flood Insurance Program (NFIP), which is managed by the Federal Emergency Management Agency or FEMA. You can call NFIP 888-379-9531 or visit the website at www.floodsmart.gov.
2. Does your policy pay replacement cost or actual cash value for a covered loss?
Actual cash value takes depreciation into account. As a result, the compensation received may be much lower than the retail price of a new item. The replacement cost is the amount necessary to rebuild the home with construction materials of like kind and quality.
3. How much is my deductible?
The deductible is the amount of a covered loss that the homeowner must pay. It may be based on a percentage of the dwelling limit of the home or a fixed dollar amount. In many hurricane-prone areas, hurricane deductibles may range from one to five percent of a home’s value. The higher the deductible, the lower the premium will be.
For a complete list of what you should know before a storm hits visit PCI’s Hurricane Headquarters.