By RICK BRAILE | Bay Harbour Group
Now that Tropical Storm Hermine has passed, leaving us relatively unscathed, it’s a good time to take a look at — and better understand — your homeowner policy, particularly its coverage as it relates to hurricanes.
There are a few things every homeowner should be aware of with regard to how their policy covers damage from hurricanes and tropical storms.
Most importantly, you could be on the hook for a hefty deductible if your home sustains hurricane damage.
This is something to be knowledgeable about, and prepare for if possible.
1. Whose fault is it, anyway?
Who pays for damage from your neighbor’s tree when it falls on your property?
The simple answer is that your policy pays.
Likewise, if their tree fell and damaged your house, fence or car, they would not be liable to pay for the repairs. This is a common claim scenario that occurs when hurricanes hit.
Unless you’ve previously put your neighbor on notice that their tree was a potential hazard to your property, there is no liability on their part and your policy pays to remove the tree as well as damages that you incurred.
Keep in mind that putting your neighbor on notice is something that needs to be done in writing. Once they’ve been made aware that their tree is a potential hazard (ex: rotting base, leaning, etc.) then they’re liable if that particular tree falls.
2. You likely have a hurricane deductible
Most policies insuring homes on Long Island contain a hurricane deductible that applies if certain wind speed triggers are met. These deductibles are usually higher than the standard policy deductible and are often a percentage of the home’s dwelling coverage. They are not all the same. They can vary by company and by policy and, although they are approved by the NY State Department of Financial Services, there is no standard hurricane deductible.
3. You can figure out the deductible
Hurricane deductible amounts are usually based on a percentage of a home’s dwelling coverage – 5 percent is common.
That means that a 5 percent hurricane deductible on a policy with a house that’s insured for $300,000 would amount to $15,000 out of pocket expense for the homeowner before the insurance begins to pay a claim.
Keep in mind, if you increase your dwelling coverage because of a home improvement or any other reason, your hurricane deductible will increase accordingly. Some companies that insure homes in Suffolk and Nassau Counties offer a flat dollar hurricane deductible of $10,000 or more.
4. Be aware of wind speeds
Another point to consider regarding your policy is the wind speed that will trigger the hurricane deductible. Once again, these wind speeds can vary by company and by policy, and there is no New York State-approved standard that applies across all policies.
A common trigger is a Category 2 hurricane, with sustained winds of at least 96 mph. Gloria was the last such storm to make landfall on Long Island, back in 1985. But hurricane deductibles didn’t even exist yet back then. They weren’t instituted widely until after Hurricane Andrew hit Florida in 1992.
As a note, Superstorm Sandy, one of the costliest storms ever to hit the U.S., was only a tropical storm when it hit Long Island.
But the great Hurricane of 1938 (The Long Island Express) was a Category 3.
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Also, policies written by “non-admitted” companies may exclude wind coverage altogether. Non-admitted companies are not regulated by the New York State Department of Financial Services and usually write policies for homes that are considered high-risk, such as beach houses or properties with a history of claims.
5. Consider a flood policy
Homeowner policies do not cover damage caused by flood. The only way to insure against a flood is to purchase a separate flood policy.
Most houses on Long Island are located in a flood zone. These zones range from B,C and X, which are all considered low risk, to AE and V zones, which are higher risk. Of course, the higher risk zones generate more expensive premiums.
Premiums on flood insurance are also based on the characteristics of the house, such as its age, elevation and whether or not there’s a basement, as well as other factors. Flood policies are written and serviced by private insurance companies but claims are paid through FEMA.
Storm surges that coincide with a high tide can cause seawater to make its way inland, damaging homes and property. If you’re unsure of your risk of flood damage your agent can tell you if your house is located in a flood zone and what that zone is.
Whether you’ve owned your home for many years or are planning on purchasing your first home, there are some important things you should know in order to make sure that you’re properly covered in the event of a hurricane.
Be prepared! If you have any questions on your policy call your agent.
They’ll be more than happy to help.
Click here to contact Bay Harbour for more information.
Featured photo: Sandy aftermath in October 2012. Riverhead News-Review.