Can your Policy Weather the Storm?

Hurricane season began the first day of June and as we approach Fall, it is only going to intensify. Even the strongest of homes have succumbed to the fierce winds of Nature’s fury when a hurricane blows.  In the event of the worst, do you have the coverage that will allow you to pick up the pieces and rebuild?

Now is a great time to pick up the phone and call us to review your policy to make sure you are ready.

1.    Do I have enough homeowner’s coverage? You want to make sure your homeowner’s policy covers replacement cost. A good rule to remember is that the cost to rebuild will almost always exceed the actual value of the house itself.  There are endorsements you can get to help close the gaps.  These include:
•    Extended Replacement Cost – pays an additional 20 percent or more above the policy limits. 
•    Guaranteed Replacement Cost – pays the full amount to rebuild your home whatever the ultimate cost. 
•    Inflation Guard – automatically adjusts the coverage limits to reflect changes in construction costs. 
•    Ordinance or Law Coverage – pays a specified amount for rebuilding to new building codes, should your community adopt stricter codes.  

2.    What does your insurance policy cover?  Most policies will cover basic things such as hurricanes, wind, theft, fire, explosion & lightning.  But it is just as important to know what your policy does not cover, these are known as ‘exclusions’.  For example, earthquakes and floods are typically excluded.  It is important to review what is and what is not covered or you could be paying for damages out of your own pocket in the event of a claim.  

3.    Have you done an inventory?  It is vital to know what you own.  Conducting a home inventory and estimating the individual value of each item will be invaluable in the case of a loss.   Chronicling your items on video is a great way to have a record of your possessions. Talk to us about Replacement Cost Coverage – this pays what it would cost to replace your personal possessions at today’s prices whereas Actual Cash Value Coverage pays to replace your personal possessions at their depreciated value.

4.    Most coastal areas include separate deductibles for hurricanes and/or windstorms in their homeowner’s policies. While most standard policies have a dollar deductible, a hurricane or windstorm deductible is usually a percentage that typically ranges from one to five percent of the insured value of the structure of your home. 

5.    Does your policy have Additional Living Expense (ALE) coverage?  ALE covers the cost of living when your home is deemed uninhabitable as a result of a hurricane or other insured disaster.  ALE will cover such costs as hotel bills, restaurant meals and other expenses, over and above your normal living expenses that are incurred while your home is being repaired or rebuilt. ALE coverage is generally equal to 20 percent of the amount of insurance coverage that you have on the structure of your house.  Make sure you are aware of how long your ALE coverage lasts, most policies have time limits on ALE reimbursements.  Make sure you are adequately covered.

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