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Storm Safety Plans – Policy Review


It is any business and homeowner’s worst-case scenario: losing part or all of the property and possessions to the distressing effects of a natural disaster, much like the properties in Puerto Rico in the aftermath of Hurricane Maria. But, there is one thing that can make a traumatic experience even harder, and that is finding out that your insurance will not be adequate to cover the damages.

Reviewing Your Policy Before the Storm Strikes

Insurance policies can be confusing, and a basic homeowner’s policy usually covers an array of natural disasters. Most policies include coverage for lightning, fire, and theft. Perils typically excluded from a policy are floods and earthquakes among a few others.

Battling to rebuild your life and property after a catastrophic incident and dealing with the insurance company is stressful. Below are several tips to help you review your policy and ensure you have adequate coverage.

  • Conduct a policy review to ensure you have adequate coverage for your specific circumstances
  • Make sure you understand the difference between an actual cash value and replacement cost coverage
  • Ensure that your insurance policy is up to date and includes any additions, upgrades, and recent improvements you may have made to your property
  • Take regular inventory of your important belongings and document them with video footage and photographs

Points to Consider When Conducting a Policy Review

Reviewing your policy should be an important part of your storm safety plan. Rebuilding, particularly after a hurricane, can mean you have to live away from the property for an extended period. This means you will incur additional living expenses for things like accommodations and meals. Make sure you keep your receipts and that you are aware of the established time limits in your policy for additional living expenses.

You should also review your deductible. Many insurance policies now carry a hurricane deductible of two to five percent of the property’s value. Find out how much your insurer will pay to rebuild your house and ensure the amount reflects the current value of your home.

One misconception is that flood damage is covered by regular homeowner’s policies, but it is not. Most policies will not cover caused by rising waters. For instance, if a hurricane tears your roof off and the resulting rain damages your possessions, your policy will pay to repair and replace possessions as the damage was the result of wind-driven rain. However, if the water from the flooded street enters the home and causes damage, owners would need separate flood insurance to cover the costs. Flood policies are typically administered by the National Flood Insurance Program, and they can also be purchased from private insurance providers. Try to review your policy regularly to ensure you have the coverage you need if a disaster like Hurricane Maria strikes again.


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