Does Homeowner’s Insurance Cover Hurricane Damage?

Homeowners' insurance policies sometimes cover the cost of repairs from natural disasters, including hurricanes, but others require supplemental policies to cover flood damage. Make sure to check what your policy covers before you need it because you might need to purchase a separate policy.

Hurricane Henri and hurricane Ida brought power outages, flooding and halted public transportation throughout the Northeast and Louisiana. Many residents were forced to evacuate and are left without homes. We explain the ins and outs of protecting yourself from extreme costs due to hurricanes and flooding.

Hurricane Ida's Path

Hurricane Henri’s Path

What Homeowners Insurance Covers

Homeowners insurance (the same thing as home insurance) is necessary to protect your home and personal belongings. In fact, almost all mortgage companies require homeowners to have insurance coverage for the property's full value. The same goes for renters, who are usually required by their landlord to have renter’s insurance. Homeowners insurance policies generally cover:

• Destruction and damage to the interior and exterior of your home: your home insurance company will reimburse you for damage due to fire, hurricanes, lightning, vandalism, or other covered disasters, so your house can be repaired or even completely rebuilt. This does not always include sheds or other freestanding structures on your property. Additionally, standard policies do not usually cover destruction from floods, earthquakes, and poor home maintenance. Therefore you might need supplemental insurance.
• Loss or theft of possessions
• Personal liability for harm to others: Liability coverage protects you from lawsuits if someone gets injured on your property. This also includes if your pet were to bite a neighbor and the associated medical bills.

Flood and Hurricane Insurance

Even though some homeowners insurance policies cover damage from flooding or hurricanes, not all do. If you live in a place at high risk of earthquakes or hurricanes, you might want to look into purchasing specialized insurance.

Flood Insurance

Flood insurance costs vary depending on the location and size of the property. The federal National Flood Insurance Program (NFIP) offers flood insurance to homeowners living in NFIP-designated floodplains. After damage has occurred, the insurance company will provide cash to the policy owner to repair the home up to the policy limit. Flood insurance covers damages from flooding caused by:

• Heavy or prolonged rain
• Melting snow
• Coastal storm surges
• Blocked storm drainage systems
• Levee dam failure

Hurricane Insurance Policies

Hurricane insurance policies usually cover damages from hurricane winds and rain. Be sure to review the exclusions and limitations of your policy because many do not cover damages from flooding associated with hurricanes. These policies can be costly, so be sure to be prepared way ahead of a potential storm.

Hurricane Insurance Providers

How to File a Homeowner’s Insurance Claim

If your house and/or property is damaged, you will need to file a claim with your insurance company. If you want to ensure a speedy claim process, there are specific steps you need to take.

1. Read over your policy to make sure the damages are covered before contacting your insurance company. Especially in the event of a hurricane, representatives will be busy, and it will save everyone time.
2. Contact your insurance company ASAP. The sooner you contact your insurance company, the sooner they can provide a payout to help you fix your home.
3. Provide documentation of EVERYTHING: the more information, the better. Take pictures and record the approximate value. The adjuster will likely ask for an inventory of the damage before coming to inspect it themself.
4. Make emergency repairs. You should make any necessary repairs that you can at this time to reduce the risk of further damage.
5. Choose trusted contractors to do the repairs. Your insurance company will not want to pay exorbitant amounts of money for the repairs, but you also do not want to hire people who will do a lousy job. Get recommendations from neighbors and get estimates from more than one contractor.
6. Receive claim payout. Once your claim is approved, and the adjuster agrees on the settlement amount, you will receive the insurance payout.

What to do if You Don’t Have Flood Insurance During a Hurricane

Flood insurance is the best way to protect your home from water damage. If you do not have flood insurance coverage, but your home was damaged by flooding, resources help. Both of the following resources are available to homeowners whose properties are located in federally declared disaster areas.

FEMA Disaster Grants

The FEMA Individuals and Households Program, or IHP, grants are available to people whose homes are located in a federally recognized disaster area. Everyone may apply for a FEMA disaster grant, regardless of their income level or whether they have flood insurance. These grants are meant to help restore your house to the point of habitability, not to a pre-disaster state. These grants can cover:

• Repairs to structure, electrical, and HVAC systems
• Repairs to water and sewage systems
• Temporary housing assistance
• Other needs assistance like medical, dental, and funeral expenses

Eligibility requirements for a FEMA disaster grant include:

• The home is inaccessible or uninhabitable due to the disaster.
• The home is where you live for the majority of the year.
• You have necessary expenses or needs not covered by insurance or another source.
• At least one resident must be a U.S. citizen, non-citizen national, or otherwise qualified resident.

Home Repair Loans from the Small Business Administration (SBA)

An alternative to a grant is a loan from the SBA. You will have to pay it back, but they have low-interest rates and long repayment periods, up to 30 years. The terms are set on a case-by-case basis and consider your ability to pay. These loans have much broader terms than the FEMA grants as to what you can use them for.

How to Prepare for Future Hurricanes

Purchase homeowners insurance if you do not already have it. It is to your advantage to get quotes from several companies to ensure you get comprehensive coverage at the lowest rate possible. If you have previously bought insurance from a company, they will often discount existing and past enrollees.

Get emergency supplies and make a plan. Stock your home and care with emergency food, water, and medical supplies. Make sure you have a plan in place and that everyone in your family is aware of what to do in case of evacuation.

Get your COVID-19 vaccine. The last thing you want is to be sick during a natural disaster. Oftentimes you will need to relocate, putting you and others at risk of being exposed to COVID-19. Protect your health by getting vaccinated today.

Hurricane Insurance Frequently Asked Questions (FAQs)

Between climate change and the new Delta variant surging across the U.S., it seems that we cannot get a break. Insurance is one way to protect your financial stability, whether it be health insurance or homeowners insurance. Below we answer a few common questions at this time.

What determines the price of my homeowner's insurance policy?

As with health insurance, policy providers take on the “risk” you will file a claim. The more likely you are to file a claim, the more expensive you will be to the insurer. The price of your homeowner's insurance policy is based on three main things:

• Past claim history associated with the home
• The neighborhood
• The home's condition

What is a Water Exclusion Clause?

The water exclusion clause in a homeowners insurance policy denies coverage for water-related damage caused by floods, tsunamis, standing water, groundwater, and drain or sewage backups. It is usually included in property insurance policies and requires homeowners to purchase a separate policy to protect against these events. According to the Insurance Information Institute, homeowners lost an average of $10,849 due to water damage and freezing, so these additional policies (known as riders) are worthwhile.

Bottom Line

Homeowners' insurance policies vary greatly. Some cover just the basics, while others provide comprehensive protection against natural disasters, including hurricanes. With the increase in frequency and severity of hurricanes, it is important to protect yourself against catastrophic costs from damage due to natural disasters is important protecting.