Are you financially prepared for the next hurricane?

It’s hard to believe that we have officially entered hurricane season.  There’s no time like the present to review insurance policies to make sure the appropriate coverage is in place and that your household items are properly documented.  Preparing early while you have the time will reduce any potential stress or panic when a storm is imminent.  While most of know what supplies we need to stock up on before a destructive storm, ensuring we are prepared financially is not always top of mind.  Do you have adequate insurance on your home, property, and business?  Are these insurance carriers financially secure?  Does your business have a continuity plan in place?

While standard homeowner’s insurance covers the structure of your house for disasters, it is important to understand the elements that could affect your insurance payout after a hurricane and adjust your policies accordingly.

·         Check your homeowner’s policy limit and make sure the amount is enough to rebuild your home:

o   The cost of rebuilding or extensively repairing a home is dependent on several factors and remember that the real estate value of a house is not the same as the cost to rebuild. It pays to understand in detail what it will cost to rebuild in the event your house is severely damaged or destroyed.  Not to mention real estate values have significantly increased, it is important that your insurance policy has kept up with the home value and replacement cost.

·         Understand your hurricane/windstorm deductible:

o   A hurricane deductible is applied only to hurricanes, whereas a windstorm deductible applies to any type of wind.  If your policy has a hurricane deducible, it will clearly state the specific trigger that would cause the deductible to go into effect.  Like any deductible, a hurricane or windstorm deductible will affect the bottom line of your insurance payout. 

o   Remember insurance companies may take a while to send adjusters and process claims.  If you have a high hurricane or windstorm deductible, make sure you have budgeted for this in your emergency or hurricane savings, this way you will have ample monies to cover the deducible; as well as other additional expenses or repairs that may arise. 

·         Understand what disasters your insurance policy covers and those it does not.

o   Standard homeowners’ insurance policies provide coverage for hurricanes, wind, theft, fire, explosion, lighting strikes and many other disasters. However, all policies also list exclusions, which are events NOT covered by the policy.

o   A common exclusion is flooding.  People tend to underestimate this risk, but 90% of all-natural disasters include some form of flooding.  Another common exclusion is sewer backups.  You may want to consider a separate flood insurance policy for your properties located in a flood zone or a hurricane-prone area.

·         Make sure your possessions are adequately insured.

o   Imagine the cost of repurchasing all your furniture, clothing, and other personal possessions.  Whether you have homeowners’ insurance or renters’ insurance, your policy provides protection against loss or damage due to a hurricane. 

·         Make sure important documents are stored on a secure cloud storage service so you can remotely access them anywhere in the world.  

We need to make sure we are getting the most out of our policies, as many of us recently received our homeowner’s policy statements and experienced the sticker shock that came along with it.  Home insurance premiums are outpacing the rapid rise of inflation.  Over the past few years, natural disasters have decreased the risk appetite among providers throughout the U.S.  While it is difficult to find top carriers in the state of Florida writing new policies, it is important that financially solvent insurance carriers are selected so they will be able to weather and survive the next wave of Category 5 Hurricane claims.  Should you have any questions regarding your current coverage, we welcome the opportunity to review your financial situation to make sure an adequate plan is in place to protect your finances and family.