Post-hurricane, what will insurance cover?
As thousands of residents on the East Coast cope with damage caused by Hurricane Irene, we thought it would be a good time for a reminder of what is covered and not by a standard homeowners insurance policy, generally known as an HO3. The vast majority of the estimated losses from this week’s storm are flood-related, which is not a covered peril on most homeowners policies. But flood coverage can be acquired in a variety of other ways. Some companies offer flood coverage as an endorsement to the homeowners policy, or it can be purchased as a stand alone policy via the NFIP or Federal Flood program (click here for more information).
Here are a few other items that could potentially limit coverage for hurricane-related damage:
- Trees – If a tree blew over and hit your house, your insurance will cover the cost of removing it to repair the damage to your home. However if the tree missed your house, some insurers will not cover the costs to remove it, while others have some limited removal costs included. There also may be coverage for a fence, or other structures, that may have been damaged by a tree. You should refer to you own policy for any specific limitations.
- Vehicles – Damage to your car from fallen trees or flooding is usually covered by an auto insurance policy, provided you carry comprehensive coverages.
- Living expenses – Most insurance policies cover temporary living expenses if the home is uninhabitable and some also cover the costs of a mandatory evacuation.
- Food – Most policies cover the cost of replacing food that spoiled because of a hurricane-related power outage but only for a limited amount, and only after a deductible is met.
With the trend of utilities not being able to restore power for a number of days, coupled with increased scientific reports of more dramatic and severe weather in our future, extended power outages may become the norm. In light of this, we have been recommending that our clients consider installing generators for all critical systems in order to improve preparedness of these events. In fact, some of the homeowner carriers will give a 5% credit towards the annual premium. Something to consider.
Good luck in recovering from this week’s storm, and we encourage all our clients to visit our website for more tips on filing a claim.
About the Author
Bruce MacDougall is a Senior Vice President in the Property & Casualty group at WGA and leader of the Private Client Group. His responsibilities at WGA include developing relationships and serving as a resource for WGA clients in all areas of property and casualty insurance brokerage and risk management consulting.