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Will your insurance cover hurricane damage?

Yes and no. It depends on how the damage was caused.

By MSN Money Partner Aug 26, 2011 1:30PM

This post comes from AnnaMaria Andriotis at partner site on MSN MoneyFirst an earthquake. Now, a hurricane. For homeowners on the East Coast, it's shaping up to be a scary week, meteorologically speaking.


Hurricane Irene looks like it will be far worse than the Virginia earthquake, and with greater damage comes greater potential insurance headaches. Much of the damage typically caused by hurricanes isn't covered by traditional homeowners insurance policies.


From broken windows to serious flooding, here is what homeowners can reasonably expect from standard insurance policies: Post continues after video.

Floods. Floods -- defined by insurers as any water that rises from the ground, including tidal waves, as well as destruction from rapid snow melts -- aren't covered by traditional policies. To get reimbursed for water damage, homeowners would need additional flood insurance, which is provided by the federal government but can be purchased through an agent or insurance company. The average flood premium is about $600 annually, but rates go up to nearly $6,000 for the highest-risk coastal properties, according to the National Flood Insurance Program.


Homeowners who live in flood zones probably have this already. Many lenders won't provide these homebuyers with a mortgage unless they've signed up for flood coverage. These homeowners can rest (relatively) easy; if their home floods, flood insurance will pay for that damage.


But even homes outside these zones could be at risk of flooding, says a spokesman for the Insurance Information Institute. Without coverage, homeowners could end up paying thousands of dollars to clean up the damage. If you've reached for the phone to call your insurance agent, put it back down: It generally takes 30 days for a new policy to kick in. Separately, renters can also sign up to protect their belongings from flood damage; premiums cost at least $50 a year.


Wind. Basic homeowners policies do, however, typically pay for damage caused by winds -- including broken windows, torn roofs and any interior damage from water falling into the home. Likewise if strong winds blow tree limbs or entire trees onto a home, garage or shed. (If a tree falls onto a car, many comprehensive auto policies will cover the damage.)


But in many states on the East Coast, homeowners will have to pay a hefty deductible before homeowners insurance policies kick in -- often 1% to 5% of the total amount the home is insured for, according to the Insurance Information Institute spokesman.


Serious damage. If a home becomes so damaged that it's uninhabitable, most standard homeowner policies will pay for a family's living expenses -- including lodging and food -- while the house is being repaired, the III spokesman says.


Buying a home as the hurricane hits. For homebuyers who are just now preparing to complete the sale, the possibility of a hurricane wreaking havoc on their new home raises a big question: Who's on the hook for the damage? If it occurs before the closing is conducted, the seller and his insurance policy have to cover the damages, according to the III. On the other hand, buyers who complete the sale before the hurricane hits are responsible. But in most cases, at the very least their basic home insurance policy should kick in.


More on SmartMoney and MSN Money:

Aug 26, 2011 3:07PM

I saw some of the the Katrina insurance reporting and I'd be very worried right about now if I lived in these areas.  In one case, a couple had both homeowner and flood insurance, but each said the other was responsible and they never got the full amount of their coverage.  In another case, part of the guy's siding ended up in a tree and the insurance company tried to claim it was flood damage, even though the high water mark wasn't anywhere near it.


If I remember rightly, it was Nationwide that came off particularly badly.  As the couple put it, "Nationwide isn't on your side."

Aug 26, 2011 5:41PM

This is an extremely misleading report. Except for damage caused by flooding or "water Damage" as defined in the policy provisions, almost all kinds of wind damage including hurricanes is covered even under the most minimal HO policy. Even a straight Fire and EC pol. covers all kinds of wind damage. Consult your Agent and Broker if you sustain damage and read your policy carefully. There are very few limitations and resrtictions applying to wind damage. Damage from flood can be far more contentious than damage by wind. If you have wind damage and are denied coverage without a satisfactory policy exclusion pertaining thereto , file a complaint immediately with your State Insurance Commissioner and bring suit for "unfair and deceptive" practices against the carrier.

Also, if you sustain severe damage, hire a public adjuster to represent you. You cannot possibly cope with the shenanigans of a company adjuster whose objective is to settle the claim as cheaply as possible, not as fairly as possible. He is not your friend.

Aug 26, 2011 8:06PM
I'm originally from New England, and have lived in Pensacola for 8 years, and have evacuated for 3 hurricanes and had major property damage from Hurricane Ivan... I can therefore speak with some authority on insurance issues, and in particular, one that is rarely ever mentioned: DISASTER INSURANCE!!!! Yes, there IS such a creature... you would think that when you purchased a home or rental property ... they make you buy Flood, Wind, and Contents insurance... but what happens when your property is damaged and you can't live in it or rent it???? VOILA: Disaster Insurance!!! It's not required nor rarely mentioned.. the premiums are inexpensive: $1 on each $1000 borrowed from the Bank.... a $100,000,00 home only costs $100/year to insure.  Just what does it do??? It merely pays the mortgage while you can't live there!!!!! Think the bank will let you off the hook just because you're living in a hotel for 6 months??? Think again!!! After 90 days they want your mortgage paid up in full or you will be in default.. your only avenue of escape is if the property is fully demolished... and that rarely happens... so if you are disaster-prone... look it up online and get it while you can!!  It can literally save your home from foreclosure after a storm!
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