Hurricane Insurance: How it Works


– [Narrator] Hey this is Jeremy from Shine Insurance And this video is all about hurricane coverage for your home

Whether you're looking at how your home is covered before a hurricane or if you've had the unfortunate experience of having gone through a hurricane and you have damage to your home and you just want to understand how your insurance policy covers We're going to get you taken care of We're going to walk you through the process so you can understand how your policy should be responding and be more clear about exactly what's going to happen next So what we're going to break down is four things We're going to start off with what's called dwelling coverage

The second thing we'll talk about is hurricane damage types There's actually more than one type of damage you could experience from a hurricane We'll talk about the hurricane coverage on your policy and finally, we'll talk about flood coverage which is actually completely different thing And then definitely stick around until the end of the video I'll talk a little bit about what you can expect hurricane coverage to cost

Obviously I don't know exactly in your area but I can give you a sense of what it costs generally So we'll do that at the very end Alright, let's talk about dwelling coverage Dwelling coverage is something that's on all home owners insurance policies and its simply the most the insurance is willing to pay for the replacement of your home So they have a coverage limit

If you look at your policy it's also called Coverage A And you'll see a number on there It's the most that they'll pay for replacing your home And that generally is between $125 a square foot to $200 a square foot That depends a ton on your location

The quality of your home, all sorts of details but that's a general range where you can expect to see the replacement cost of your home set up We need to talk real quickly about covered perils because the rest of this video focuses on it Covered perils are simply bad things that happen to your home So insurance policies cover certain types of occurrences or bad things that happen Those certain types of bad things that happen are called covered perils and all insurance policies have them

Different policies cover different things and I'm not going to dig deep into all the different things because we're focusing on hurricanes in this video There's other videos in our channel that you can definitely dig more into covered perils if you want but the point here is just the different policies cover different things and that's important obviously because we're talking about a specific thing here which is a hurricane But a hurricane doesn't just have one potential type of damage or one potential source of damage Really, there are three major hurricane perils And the first one is obvious

Wind Hurricanes can have up to 180, 190 mile an hour winds in the worst case scenarios And that's obviously going to do damage potentially to a house And so the wind is one of the major factors that do damage in a hurricane situation So that's one of the perils

The second is hail Sometimes hail happens as a part of a hurricane Tornadoes also happen but that would fall under wind So those two things are two of the things that happen And in the worse case scenarios as we've seen from some in the recent past is flooding, that could be storm surge or the rising of water because of burst levies or something like that

So what does your homeowners insurance policy cover? Well, let's break down these three things Wind, sometimes covered Hail, sometimes covered And flood, never covered on your homeowners insurance policy In fact, around the United States, flood insurance is not covered on your homeowners insurance policy

And I'll talk more about that when we dig into it But those are the three major hurricane perils, major bad things that can come from a hurricane So let's look at the coverage that you have for a hurricane It's interesting in areas that are susceptible to hurricanes Insurance companies have specific coverages for wind or hail damage from a hurricane

So in a hurricane situation, this hurricane coverage applies at a specific time It's when the National Weather Service has issued a hurricane watch or warning any where in your state So if there is a watch or warning on the southern peninsula of Florida, even if you're in northern Florida or something like that, the hurricane coverage on your policy and the way those specifications are set up is going to apply So if there is a warning or a watch anywhere in the state that you live in, then your hurricane coverage would apply on your policy So what are the options for hurricane coverage? And usually this is really well noted on your insurance policy

If you're looking at your insurance policy right now on the declarations pages and you live in a state that's susceptible to hurricanes, you likely see very clear details on that document that says what your hurricane coverage is And there's really three options The first one is that it's basically the same as coverage for all other perils Usually it has to do with the deductible So if you have $1,000 deductible on your policy, you may have hurricane coverage with $1,000 deductible

So same coverage It's just specifically for the hurricane peril But it doesn't really matter if it's not any different because it's exactly the same Most insurance policies have a specific hurricane deductible I see a 2% deductible a lot, it's very common

So the deductible is higher for a hurricane So you pay more out of pocket in a hurricane situation than you might for all other kinds of things And the reason they're setting that up is because hurricanes affect tons of people at the same time and insurance companies get swamped with new claims all at the same time And so they're trying to pass a little bit of the cost on to the insurance policy holders so they don't get quite so many claims and quite so much pay out at the same time Oftentimes, you have a specific hurricane deductible that could be 2%, could be 4%

I've seen both of those often Could even be 10% And again, that's a percentage of the dwelling coverage Like we talked about earlier in the video so if you have a $200,000 house, you have a $200,000 dwelling coverage and you have a 10% deductible then you would be responsible for the first $20,000 before the insurance company would jump in If you had a $200,000 house and you had a 2% deductible, then you would be responsible for the first $4,000

So that's a little bit better So the hurricane deductible can be specific that's how I've seen it set up the most And oftentimes, that deductible is higher than the deductible for other perils And then finally, no coverage for hurricanes at all And usually this would say wind excluded for hurricane coverage

And now it simply mean that you chose not to have any hurricane coverage at all on your insurance policy So the insurance company would not be a part of wind or hail damage associated with the hurricane and so that is a possibility as well So those are really the three different options that you probably see on your homeowners insurance policy for hurricane coverage Let's talk about flood coverage Floods are defined as the natural rising of water and again, no regular homeowner's policy covers floods

Because it's covered elsewhere, we'll talk about that in a second But this also includes storm surge So oftentimes in a hurricane situation, where flooding happens is because a large storm surge came in with the hurricane and that is considered flood along with if a levy would've break flooding happened in a neighborhood or something like that Riverbanks overflowed and flooded, that's all considered natural rising of water and is flood coverage So how can you get flood coverage? Well you can purchase it

You must purchase a specific flood insurance policy This policy is almost always backed by the government, backed by FEMA There are some flood insurance providers that are not government backed I'd be a little bit careful with those especially if you're in a high risk area But most of them are FEMA backed insurance policies

And you have to get them specific for that flood peril So it only covers one thing It's a complete insurance policy But it only covers one specific thing and that is the natural rising of water or flood coverage So if your properly covered for a hurricane, you would have your normal homeowner's policy

You would see a hurricane coverage deductible on that policy Maybe it's the same as your all other perils deductibles or maybe it's higher, it usually is like a 2% or a 4% deductible And then you would also have a flood insurance policy specifically for the peril of flood Let's talk about the bonus What does hurricane coverage cost? And now we're talking about the hurricane coverage on your normal homeowner's policy as well as a flood insurance policy and the answer obviously depends on where your home is and how possible a hurricane or how possible flooding is if you're in a low lying zone that's on the goal for Mexico or on the Atlantic in Florida

You're going to have higher cost than someone who's not there But in general, these coverages do tend to be pretty expensive Hurricane coverage for the wind peril on your normal home ownership policy tends to be pretty expensive and a flood insurance policy tends to be expensive as well unfortunately So I've seen where those two coverages for hurricanes are two or three times the cost of the rest of your homeowner's insurance policy completely So I've seen even higher than that where you're paying $1,000 for your homeowner's insurance policy and then two or $3,000 for just the hurricane coverage on that policy so it can definitely be really expensive whether that's right or not is a whole another conversation and definitely leave your comments, leave your thoughts in the comments section below this video

I'd love to hear them So, what did we learn? Well, we went over the dwelling coverage and talked about just the coverage that you have for your home itself We talked about the fact that hurricane coverage really has three different damage types Wind, hail and flood The hurricane coverage on your homeowner's policy for the wind or hail part

And finally flood coverage is its own insurance policy completely separate thing Not on your homeowner's insurance policy Finally the bonus, what you can expect hurricane to coverage to cost and the basic answer is more than it should A lot so there you have it Do you want more? Well I got more for you

First of all roof claims Especially if you're going through claims situation right now with a hurricane, this really walks you through the claim process Yes, it focus on roofs but it could be any other kind of wind or hail damage I think it does a good job of showing you exactly how a claim process should work A new home buyers guide

We got a whole playlist of different videos about buying a home If you already own a home then maybe you don't need that playlist But if you're thinking about buying a home, this is a great playlist to walk you through the process And finally if you want to check out our website, Shineinsurancecom, we have blogs, a lot more information out there

Different stuff about insurance, about home buying About business ownership We have it all right there And as always, the last step in this video is to please subscribe Hit that good button right below this video

Like this video if you felt like it really helped you out and finally share it with those folks who you feel may need this information If you know someone who needs information about their hurricane insurance coverage then maybe this video can help Please share it with them Post it out there in your social media worlds Alright, this is Jeremy and until the next time, have a wonderful day

Source: Youtube


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