Hurricane Sandy is a time to batten down the hatches and head for higher ground. For homeowners looking to secure their properties there are a number of steps they can take to prepare.
There’s also things they’ll need to know dealing with the aftermath once it passes and their hurricane deductible kicks into place.
“As everyone who has lived through previous hurricanes knows, once even a little bit of water gets inside a house, it can cause severe, lasting damage,” Brenda O’Connor, senior vice president of public affairs at the Insurance Institute for Business & Home Safety, said in a statement. “Now is the time to act; do not wait. Give yourself a bit more peace of mind about how your home or business and your possessions will fare when Sandy arrives.”
Although much of the focus is on coastal areas, the storm’s reach will extend far inland, where buildings typically aren’t designed to handle high winds.
“It is important to remember that hurricanes are not just coastal events. These severe storms don’t stop when they get to a state line or an interstate. High winds and strong, wind-driven rain can travel hundreds of miles inland, causing significant damage and flooding,” Julie Rochman, IBHS president and CEO, said in a statement.
Last year, for example, Hurricane Irene caused major flooding in several states, including Vermont and Pennsylvania. In 2008, Hurricane Ike made landfall on the Gulf Coast of Texas and moved thousands of miles inland to Ohio, where the storm caused more than $1.6 billion in property damage – making it the largest single loss event in the state’s history.
The IBHS recommends the following to reduce flood-related damage:
• If high winds and rain have not yet struck, clear drains, gutters and downspouts of debris.
• Install any hardware needed to put up shutters or pre-cut plywood to protect windows and doors. This will allow for easier deployment of covers if and when the storm approaches.
• Bring free-standing, loose items, such as garbage cans and lawn furniture inside, and pick up yard debris that could become projectiles during high winds.
• Cut weak or dead tree branches, along with branches hanging over structures – these could be broken off by high winds and cause severe property damage.
• Make sure caulking around windows and doors is in good shape (not cracked, broken or missing), and fill holes or gaps around pipes or wires that travel from outside to inside the building.
• Roll up area rugs and carpeting, where possible, and store them on higher floors or on counters. This will reduce the chances of rugs soaking up water like sponges and ruining floors or growing mold.
• Elevate furniture and electronics off the floor, particularly in basements and first floor levels, on bricks or blocks at least 12 inches above the projected flood elevation.
• Anchor fuel tanks. An unanchored tank can be torn free by floodwaters; broken supply lines can cause contamination or, if outdoors, be swept away to damage other property.
• Prepare an evacuation kit with important papers (including insurance documents), medication and other items that would be needed if forced to be away from home for several days.
• If the home is equipped with a sump pump, inspect the pump and drains to ensure proper operation. If the pump has a battery backup, make sure batteries are fresh or replace them.
• Shut off electrical service at the main breaker if the electrical system and outlets may be under water.
IBHS’ free Hurricane Sandy Preparedness and Recovery Resources are available for residents and others who may find themselves in the storm’s path when it makes landfall. Resources include guidance on reducing property damage before the storm hits, and repairing, rebuilding and recovering safely following the storm.
The hurricane deductible
Homeowners may also need to review their insurance policy to make sense of their hurricane deductible is, according to the Insurance Information Institute.
Hurricane deductibles are incorporated into many of the homeowners insurance policies issued in the 18 coastal U.S. states bordering the Atlantic Ocean and the Gulf of Mexico as well as in the District of Columbia.
A deductible is the amount of money policyholders pay out-of-pocket before their insurance coverage kicks in; it is important to understand whether a specific hurricane deductible applies to a policy.
“Due to increased coastal development and greater hurricane risk, hurricane deductibles were created to help keep private sector property insurance coverage available and affordable by having the policyholder share more of the risk with their insurer,” said Michael Barry, vice president of Media Relations, at the I.I.I. said in a statement.
A standard homeowners insurance policy deductible is usually either $500 or $1,000. Hurricane deductibles are calculated as a percentage of the insured value of a house. That percentage, and details about a policy’s hurricane deductible, is generally listed on the Declarations page, the first page of an insurance policy.
States allowing insurers to incorporate hurricane deductibles into their homeowners policies include: Alabama, Connecticut, Delaware, Florida, Georgia, Hawaii, Louisiana, Maine, Maryland, Massachusetts, Mississippi, New Jersey, New York, North Carolina, Rhode Island, South Carolina, Texas and Virginia.
Hurricane deductibles apply solely to damage caused by hurricanes, and typically vary from 1 percent to 5 percent of the insured value of a home. For example, a policyholder whose home is insured for $200,000 with a 2 percent hurricane deductible would have to pay the first $4,000 needed to repair the home, if the loss were caused by a hurricane.
In some coastal areas with high wind risk, insurers may incorporate hurricane deductibles even higher than 5 percent. Moreover, in some states policyholders can select higher hurricane deductibles in order to reduce their premiums. Insurers’ hurricane deductible plans are reviewed and approved by state insurance regulators.
Whether a hurricane deductible applies to a claim depends on the specific “trigger” selected by the insurance company. These triggers vary by state and insurer and usually apply when the National Weather Service officially names a tropical storm, declares a hurricane watch or warning, or defines a hurricane’s intensity.
Due to these differences, the I.I.I. suggests speaking with an insurance professional to learn exactly how a particular hurricane deductible works.
For an in-depth look at this issue, see our story “Fiscal planning key to hurricane season survival”
