Failed power lines can be seen on Highway 90 after Hurricane Laura hit Iowa, Louisiana on August 27, 2020.
Elijah Nouvelage | Reuters
While communities along the Gulf Coast are assessing the damage caused by Hurricane Laura, homeowners elsewhere may want to review their own insurance coverage.
The massive storm landed in Louisiana near the Texas border early Thursday as a Category 4 hurricane that was causing sustained winds of around 150 mph and creating a dangerous storm surge. While Laura is weakened as she continues to move north, this is a good reminder that hurricane season is far from over.
The season runs from June 1 to November 30, although the peak is in mid-August through late October. And while many hazards fall under the standard part of your homeowners policy, some weather-related events may be covered differently – and some may not be covered at all.
"Homeowners insurance is great, but the most important thing is to understand what it means to you," said Fabio Faschi, an expert in such insurance for the Policygenius online marketplace.
How hurricanes are covered
If you live in a state on the east coast or the Gulf of Mexico, there is a good chance your homeowner policy has a hurricane deductible. Likewise, in states more prone to wind-related events – i. H. Tornadoes – probably a deductible between wind and hail. You could have both.
Typically these amounts range between 1% and 5% (with a minimum of $ 500) depending on the specifics of your insurance contract. Some homeowners may opt for an even higher deductible if it is available. In general, the higher the deductible, the lower the premiums and vice versa.
It is important to note that for these percentage deductibles, the amount is based on your insurance value and not on the damage caused.
Five most expensive hurricanes in the US
Storm year category Adjusted costs Katrina20053 $ 170.0BHarvey20174 $ 131.3BMaria20174 $ 94.5BSandy20121 $ 74.1BIrma20174 $ 52.5B
If your home is insured for $ 200,000 and you have a 2% hurricane deductible, you are responsible for covering the first $ 4,000 regardless of the total cost of the damage. With a 5% deductible, this amount would be $ 10,000.
This means that it is wise to have a plan in place to cover your stake after a disaster.
It's also important to make sure the amount of insurance you have for your home is based on replacement cost, not market value, Faschi said.
"You could buy a property for $ 1 million, but it might not cost $ 1 million to replace," he said.
The opposite could also happen: the replacement costs could be higher than the market value.
Homeowner policies generally exclude floods from coverage – something more than half (53%) of homeowners don't know, according to a Policygenius survey.
However, according to the Federal Emergency Management Agency, just 1 inch of water in your home can cause damage up to $ 25,000 worth of damage. And every fourth flood insurance claim comes from outside a high-risk zone.
For insurance coverage in most situations, you will need separate flood insurance either through the federal national flood insurance program or through a private insurer.
However, be aware that there are exclusions and limitations to coverage. It takes 30 days for the flood policy to take effect. The average annual cost is $ 700, although this can vary widely.
"If you are in an area where there is not much flood, it will cost you less," said Faschi. "But if you live right on the coast it will cost you more."
You can check your flood risk on realtor.com which has this information along with other details about the properties.
bits and pieces
Before a storm hits it is worth taking photos to document the condition of your home and belongings.
"That can go a long way towards documenting your claim," said Faschi. "It takes a lot of guesswork on the claims adjuster."
The idea is to have evidence of what you own along with a record of what shape it was in before the storm. If you cannot prove the previous condition of your now missing side door, for example, this can lead to violations or rejections in the claims process if the insurance company has reason to question whether it has been properly maintained.
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In addition, important documents such as tax returns and birth certificates should be kept in a safe place in a waterproof container. Duplicates should either be kept with a trusted person elsewhere or electronically stored (i.e. on a flash drive or online cloud storage).
You should also have an emergency plan in place in case a disaster forces you out of your home, experts say. While this is more difficult to determine during the pandemic, keep in mind that a storm-damaged home may not be habitable until repaired.
Note that if you suffer property damage and your home is in a federally designated disaster area, the loss may be considered a tax deduction.
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