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Storms are Brewing: Time to Check your Insurance Policy

Benzinga Contributor

Benzinga article by Paul Tyler, CMO of Nassau Financial Group

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What Happens if Your Home is Slammed by Two Hurricanes?

Most people worry about coverage for one bad hurricane hitting their home. If two hurricanes hit your house in quick succession, would you be covered by your homeowner’s policy? What once may have been a theoretical exercise now seems plausible. Tropical storms Laura and Marco threatened to strike Texas and Louisiana as hurricanes in late August at nearly the same time. Fortunately, Marco turned into a tropical storm before hitting the region. However, damage from Hurricane Laura alone proved substantial. Given NOAA’s prediction of an active hurricane season in 2020, we may not be so lucky the rest of the year.

If you live in any coastal state, you should first look closely at the terms of your policy. Nearly all homeowners’ policies include special terms in case of a hurricane. Understand what is and what isn’t covered. Flood damage is never covered by homeowners’ policies. Damage from rain generally is always covered. Wind damage may or may not be covered. If you don’t have wind coverage, you may want to consider purchasing it this season before the next storm.

Also understand how your deductible does or doesn’t change during a hurricane. Many policies change deductibles from a flat dollar amount, like $5,000, to a percentage of your home value, like 15%. These terms typically apply from the moment an organization like the National Weather Service issues a hurricane watch until, in some cases, 72 hours after the service lifts the alert.

If two storms hit, pay close attention to how the weather services post alerts. If the two storms cause separate alerts, you could pay two deductibles in a very short period of time. If the National Weather Service issues only one general alert, you could make the argument that you owe only one deductible for the combined damage.

Also, make sure to understand the exact cause and sequence of the damage to your house as best as you possibly can. Imagine you lack wind coverage and the storm blows off your roof. The storm surge then floods your house. The second storm then passes over and rains directly into your home. You would likely not be able to claim damage from the water because the flood caused the initial damage.

However, imagine the first storm blows off your roof and rains into your house. As the second storm passes over, the storm surge then floods the same damaged areas of your house. In this case, your policy could possibly cover the storm damage because rain proved the culprit.

Needless to say, read the fine print. Each carrier approaches hurricane coverage differently. And each state adds additional conditions and options you should understand. Most importantly, use the opportunity now to make any necessary home repairs before the next storm hits to minimize damage. Remove any older trees that could easily fall on your house. And take adequate precautions to protect your home in the event your area receives a dreaded hurricane alert later this year.

Nassau Financial Group

Nassau Financial Group, based in Hartford, CT, currently has combined assets of $26.3 billion and capital of $1.1 billion. Our business covers four segments: insurance, reinsurance, distribution and asset management through affiliates. Paul Tyler serves as CMO and helps run the company’s Insurtech incubator. He earned a JD from Cornell Law School and an AB from Princeton University.

 

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