K
  • Insurance: Storm Coverage

    By Jennifer Martin, CPCU, Property-Casualty Insurance Subject Matter Expert
    Kaplan University School of Professional and Continuing Education
     
    Published August, 2014 

    The Atlantic hurricane season is now in full swing. If you live in a hurricane-prone state, you should check your insurance coverage before a storm hits to be certain you have adequate coverage. Hurricane damage may result from wind, rain, wind-driven rain, flooding, or storm surge. For optimum protection against these losses, it is recommended that homeowners purchase more than one type of insurance policy:

    • A homeowners insurance policy
    • A flood insurance policy
    • A separate policy for windstorm damage (if it is not covered under your homeowners policy)

    What Will My Homeowners Policy Cover?

    Standard homeowners policies typically cover damage from wind, rain, and, in certain circumstances, wind-driven rain. They do not cover loss from flooding or storm surge.

    Wind-driven rain is rain that blows into a building through an opening in the building. This damage is covered under standard homeowners policies, but only if the wind first causes damage to the building that allows the rain to enter.

    Here’s an example. If you accidentally leave a window open during a hurricane and rain blows through the window, any resulting damage is not covered. However, if the rain enters through a window that was blown out by the storm’s high winds, the resulting damage would be covered.

    Homeowners insurers writing policies in areas at high risk for hurricanes may exclude wind damage altogether. If your policy excludes windstorm, it is recommended that homeowners purchase a separate policy to cover this peril.

    Your policy may also have a separate windstorm deductible or named storm deductible. A windstorm deductible is a deductible that applies to damage caused by any type of wind, such as wind from a thunderstorm or a winter storm. A named storm deductible applies only to damage caused by storms that have been officially named by the U.S. Weather Service (e.g., Hurricane Katrina, Tropical Storm Allison). Windstorm and named storm deductibles are usually expressed as a percentage of the total insured value on the property, such as 2 percent or 5 percent, and apply in addition to the standard policy deductible. So, if your policy includes a separate windstorm or named storm deductible, you may have to pay two deductibles after a hurricane.

    If you are unsure about how your homeowners policy would respond to damage from a hurricane, contact your insurance producer or insurance company.

    What Is Covered By Flood Insurance?

    Homeowners who want protection against flooding and storm surge need to purchase a separate flood insurance policy. Most flood insurance policies are written through the National Flood Insurance Program (NFIP). You can buy a flood insurance policy directly from the NFIP or through private insurers that participate in the program.

    NFIP policies specifically define what is considered a flood:

    Flood insurance covers overflow of inland or tidal waters and unusual and rapid accumulation or runoff of surface waters from any source. However, the flood must be a general and temporary condition of partial or complete inundation of two or more acres of normally dry land area or of two or more properties (at least one of which is yours). Note that the NFIP considers any type of damage from wind-driven rain to be windstorm-related and not a flood.

    Significant property damage may also be caused by storm surge.Storm surgeis the change in the water level that is due to the presence of the storm, over and above the predicted astronomical tide. Storm surge is caused primarily by the strong winds in a hurricane or tropical storm pushing water toward the shore.

    If you live in an area that is at high risk for flooding, your mortgage provider may have required you to purchase flood insurance. For more information, contact your insurance producer or the NFIP at http://www.fema.gov/national-flood-insurance-program.

    What If I Have a Loss?

    If your home is damaged in a hurricane, contact your insurance producer or insurance company as soon as possible. Your company will send an adjuster to investigate your claim and determine the cause of loss.

     


    References

    Tropical storms. (n.d.). Retrieved from http://www.weather.com/outlook/weather-news/hurricanes/articles/tropical-storm_2010-08-04

    Frequently asked questions. (2014). Retrieved from https://www.floodsmart.gov/floodsmart/pages/faqs/is-flood-damage-from-wind-driven-rain-covered.jsp

    What is storm surge? (n.d.). Retrieved from http://www.nws.noaa.gov/om/hurricane/resources/surge_intro.pdf

     

    Jennifer Martin, CPCU, is a property-casualty subject matter expert at Kaplan University School of Professional and Continuing Education. She has a Bachelor of Arts degree in English from Purdue University.

     The views expressed in this article are solely those of the author and do not represent the view of Kaplan University.

     

    Back to Center for Excellence

  • Accounting - Ethics Thumb

    Keep Your Organization From Going Down the Road to “Ethical Collapse”!

    By Cynthia Waddell, PhD, CPA, CFE

    Article by Faculty
    Jerry Taylor

    Cost of Capital

    By Jerry Taylor

    Article by Faculty
    GeoffreyVanderPal Thumb

    Identity Theft and Privacy

    By Geoffrey Vanderpal

    Article by Faculty
    Fall_Clean_Up

    Fall Clean Up

    By Dr. Denise Schoenherr

    Article by Faculty
    Stanley Self Thumb

    Revised GAAP Treatment for Goodwill

    By Stanley W. Self, CFE

    Article by Faculty
    Career Resources Thumb

    Accounting

    By Rachel Byers, Full-Time Faculty, School of Business

    Accounting firms are taking advantage of some emerging trends.

    Career Advice
    Career Resources Thumb

    Investments and Wealth Management

    Change is the name of the game in wealth management!

    Career Advice
    Career Resources Thumb

    Real Estate

    Most people do not realize there are a variety of jobs in this field.

    Read More
    Career Resources Thumb

    Risk Management and Insurance

    According to the BLS, employment of insurance sales agents is projected to grow.

    Career Advice
    Definitions Thumb

    Accounting

    Access definitions and FAQs related to accounting.

    Read More
    Definitions Thumb

    Investments and Wealth Management

    Access definitions and FAQs related to investments and wealth management.

    Read More
    Definitions Thumb

    Real Estate

    Access definitions and FAQs related to real estate.

    Read More
    Definitions Thumb

    Risk and Insurance

    Access definitions and FAQs related to risk and insurance.

    Read More
    Toby Talks

    Toby Talks: Is Now a Good Time to Start a Real Estate Career?

    Kaplan Real Estate Education's Toby Schifsky looks at the factors to consider when pursuing a real estate career.

    Watch Now
    RE_Tips

    Toby Talks: Do I Need a Business Plan?

    Toby Schifsky talks about the importance of goals and action steps for achieving them.

    Watch Now
    Study Tips

    Tips for Insurance Licensing Exams

    Access preparation and practice advise from Kaplan Financial Education experts Mary Orn and Julie Ramsey.

    Wach Now
    Maylee Testimonial

    Maylee's Success Story

    Maylee talks about her experiences with Kaplan Financial Education and preparing for her exams.

    Wach Now