Be prepared for this year’s hurricane season
Today is the start of hurricane season, which will continue until November 30. Now is the time, before the surge, to make sure you are prepared. One of the most crucial but often overlooked steps is to check your insurance policy. This list will help streamline the important points to cover to ensure that you and your property are covered:
- Check your policy limit
Make sure that you have enough coverage to completely rebuild the property if it is severely damaged or demolished. Also, bear in mind that the cost to rebuild is not the same as the real estate value.
- Make a list of everything you own and how much it’s worth
Most insurers provide coverage for personal property, approximately 50 to 70 percent of the amount of insurance you have on the structure of the building, but is this enough? The best way to determine what you truly need is to compose a detailed inventory of your belongings and their approximate value.
- Make note of the percentage of the hurricane/windstorm deductible stated in your policy
Insurers in coastal states include separate deductibles for hurricanes and windstorms in their policies. However, unlike the standard “dollar deductible” on an auto or home policy, a hurricane or windstorm deductible is usually expressed as a percentage. You can find it stated on the declarations page of your policy.
- Know specifically which disasters your insurance policy covers
Standard insurance policies provide coverage for hurricanes, wind, explosion, theft, fire, lightning strikes, and numerous other disasters. However, all policies also list exclusions. Understand the exclusions in your policy, and talk to your insurance professional about purchasing separate coverage. Otherwise, be ready to pay the cost of those damages out-of-pocket. Understand where storm surge is in your policy, specifically is it within the wind definition or the flood definition. Flood is an aggregate peril, while a windstorm is not. Make sure to also understand how your applicable deductible will apply. The percentage is usually based on the total insurable value (TIV) at the location suffering loss or damage, which includes the TIV for the building, contents, and business interruption.
- Understand your flood insurance policy
If a hurricane strikes, the biggest coverage gap that could result in higher out-of-pocket costs is flooding. 90 percent of all natural disasters, however, include flooding. If you reside in a flood zone or area where hurricanes are common, a separate flood insurance policy is essential. There is a 30-day waiting period for new flood insurance policies to take effect, so purchase this sooner rather than later. Also, be aware that there are various exclusions and limitations with flood insurance, especially for basements.
- Take the following steps prior to the storm and during the claims process
- Take thorough pictures of your property, inventory, roof, and all building renovations.
- Your database and records are essential to your business. Make full copies and keep the copies off-site, as these records are crucial when documenting your claim.
- Put a claim management team together prior to the loss. Only an individual who is knowledgeable in insurance should handle interactions with your carrier.
- Perform emergency work such as putting up tarps, pulling wet drywall and carpet to prevent mold, and boarding up openings and protective fencing to protect your belongings and keep others from getting hurt.
- Take post loss pictures or video and retain all receipts of all actions.
About the Author
Rachael Robinson is a Vice President and Senior Property Advisor for WGA. She is responsible for the design and implementation of complex property insurance programs for WGA’s corporate clients.