Hurricane Season is Here - Are You Underinsured?

June started the hurricane season in the U. S. Many homeowners lack adequate insurance for natural disaster damage according to Wall Street Journal authors Nicole Friedman and Leslie Scism. 

Last year's three major landfall hurricanes - Harvey, Irma, and Maria - revealed a wide-spread lack of full insurance coverage for homeowners in Texas, Florida and Puerto Rico. Storms like these usually serve as a wakeup call to homeowners resulting in increases in flood insurance, nationally sold, and up dates in homeowners policies. Inspite of these storms, regulators, trade groups and government data reveal that many are still under insured.

Most people have home insurance (especially if they have a mortgage) but may not have flood insurance. There are two types of flood damage, damage from flowing water or from wind-driven rain. Homeowners insurance policies may not cover both. Be sure to check your policy. 

The number of federal flood policies covering Florida homes and small businesses rose 2% between September 2017 and May 2018 to 1.76 million according to government data.

"We often see post-disaster increases in flood policies, but it's not unusual to see some of those dropped when they come up for renewal," said David Maurstad, chief executive National Flood Insurance Program. "We have a long way to go to meet our goal of closing the insurance gap."

Insurers in Florida received nearly one million Irma claims as of June 12 and 91% of them have been closed, according to state's Office of Insurance Regulation. Over a third of claims did not entail payment, indicating the damage wasn't covered under the current policy or the loss value was less than the deductible.

Homeowners often fail to increase policy limits if they expand or upgrade their homes, regulators said. They find policy limits are insufficient after a disaster.

"People had no idea that they had a hurricane deductible following Irma," said Barry Gilway, chief Executive of Citizens Property Insurance Corp. "There's still a lack of education in the industry regarding what is actually covered.

How about you? Do you know what is actually covered on your homeowners policy? Now is the time to review your policy coverage. At Dave Reed Insurance, the Peace of Mind People®, we are always ready to answer your questions. Call our offices at Creighton Road, (850) 494-2264 or N. Navy Blvd. (850) 453-8555.