Are you sure you know the difference between hurricane and flood insurance?  Are you willing to bet your home and your belongings on it?

It’s been over a decade since Hawaii was hit by a hurricane, but many homes have been flooded within the last year.  Hawaii property owners need both hurricane insurance and flood insurance because each type of coverage covers different causes of damage.

Flood and Hurricane Insurance Basics
A standard homeowners policy doesn’t cover flooding or hurricane damage.  You need to purchase these coverages separately.  Hurricane insurance is usually a rider added to your homeowners insurance policy for additional cost and flood insurance policies are sold separately.   Very few insurance companies include hurricane coverage with the basic homeowners policy.  Some insurance companies require you to obtain a separate hurricane insurance policy.

Hurricane insurance covers rain damage (falling water) and flood insurance covers damage caused by rising water.  Example:  although a hurricane produces a storm surge and its associated water damage, flood insurance is required to cover damage caused by a storm surge.

Many homeowners assume that if they’re not in a designated flood zone, they don’t need flood insurance.  Big mistake.  FEMA reports nearly 25% of flood insurance claims are paid to owners living outside an established flood zone. Replacement Cost and Actual Cost Coverage
You need to know what your policies will and won’t cover.  You also need to know how the insurance company will pay for damages.  Replacement cost coverage will pay to rebuild or replace what you had before it was damaged with materials of similar kind and quality.  While the settlement you receive under actual cost coverage may be less than a replacement cost settlement, some people opt for actual cost coverage because the premiums are lower.

Talk to your insurance agent to be sure you have the coverage you need.

Please contact Michael Zimmerman if you need a referral to a competent insurance agent.

You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.