Discover the critical insurance gaps that could leave you financially exposed during hurricane season and learn how comprehensive coverage can protect your most valuable assets.
Hurricane season is signaling its imminent onset, barely a fortnight away from June 1 to November 30 but forecasters are eyeing a number of key trends that may be indicative of an active start to the season.
With climate patterns hinting at stronger storms, now’s the perfect time to check your insurance coverage before a disaster strikes. Quite a number of homeowners come to the sad realization, too late, that normal policies leave large gaps in protection—pretty much the time they need it the most.
Adjacent and directly in common hurricane paths, Florida remains the most hurricane-prone state according to the National Hurricane Center. However, North Carolina, Texas, and Louisiana also face regular severe hurricane threats. The haunting memories of Hurricane Harvey and Hurricane Katrina still linger, for these storms are arguably ranked as the two most destructive Atlantic hurricanes in U.S. history.
Knowing which steps to follow in the wake of hurricane damage can greatly influence the recovery process. A written plan will enable you to restore function in both your property and everyday life much sooner. Let’s explore eight common oversights that could cost you thousands—and how Gonzalez Insurance ensures you’re fully protected.
8 Insurance Gaps That Could Leave You Vulnerable
1. Flood Damage: The #1 Misunderstood Gap
Arguably one of the deadliest misconceptions regarding homeowners’ insurance is that it covers flood damage. Flooding is expressly excluded by any standard policy, for whatever reason. Therefore, the destruction of a roof damaged by winds from a hurricane that allowed subsequent rainwater ingress may fall into the water damage clause of coverage of a homeowners’ policy. Rising floodwaters entering a home will not be covered without a flood insurance policy.
The NFIP (National Flood Insurance Program) typically insures most flood policies in the U.S. with many limitations, among them a 30-day waiting period before coverage actually commences. Moreover, NFIP policies generally limit coverage for residential buildings to $250,000 and content to $100,000—a sum usually considered never to be enough for full recovery, given that these limits are far too low in high-value homes. Private flood insurance options may offer higher limits but must be secured well before a storm is on the horizon.
2. Windstorm Coverage: Not Always Included
As far as hurricane-prone zones are concerned, critical protection gap exclusion or limiting wind damage coverage in standard homeowners’ policies is a trend many insurers have been following. In some coastal regions, a distinct windstorm policy may be necessary or an endorsement for coverage of hurricane-force wind damage.
For those policies that do cover wind damage, hurricane deductibles are generally higher—approximately 2-5% of your insured home’s value versus the typical deductible. In what would be a significant burden in terms of cash flow immediately after a disaster, a $500,000 home would mean that the homeowner would have to pay the first $10,000-$25,000 themselves before insurance pays anything.
3. Temporary Housing: Will Your Policy Cover It?
Usually, most homeowners’ policies provide for ALE (Additional Living Expenses) for temporary housing if the home is uninhabitable. However, it seems the policy may not extend for limits sufficiently long to actually permit any reasonable degree of recovery from a hurricane.
In large-scale disasters, scarcity of available housing can raise costs and could burn through your coverage limits very quickly. Many policies limit ALE to 20% of dwelling coverage or impose time limits like 12 months. Rebuilding after a devastating hurricane may take much longer, especially when contractors and materials are in high demand throughout the affected area.
4. Business Interruption: Protecting Your Livelihood
Unfortunately for the business owner, income lost during closure and recovery is not covered under standard commercial property insurance. Without specific business interruption cover, your business could be facing financial ruin—even if the property damage itself is covered.
What does a business interruption policy do? These now replace lost incomes, cover ongoing expenses such as payroll and rent, and may even fund a temporary relocation. The only downside is to have a waiting period before benefits begin and many exclude certain scenarios unless there’s an endorsement expressly stating so.
5. Sewer Backups & Water Intrusion
Flood waters associated with hurricanes frequently overwhelm the municipal sewer systems, causing an ensuing backflow internally in houses and businesses. This would generally not be covered by a home policy or flood policy unless sewer backup damages were purchased specifically.
Further, depending on how water seeps into the house through the foundation walls during heavy rain conditions, it runs the risk of being caught up in that gray area of coverage between homeowners’ policies and flood policies that would have left you bearing the costs of extensive damage and mold remediation.
6. Underinsurance: The Costly Surprise
Many discover post-hurricane that their insurance limits haven’t kept up with rising construction costs. This problem means your policy might only cover part of the rebuilding expenses. After major hurricanes, construction costs surge due to demand, widening this gap.
Experts recommend coverage for at least 100% of rebuilding costs (not market value), with extra for post-disaster inflation. Extended replacement cost endorsements can provide an additional 25-50% over policy limits if rebuilding costs more than expected.
7. High-Value Items: Are They Covered?
Standard policies have strict limits on valuable items like jewelry, art, and electronics—often only $1,000-$2,500 per category. After a hurricane, these limits apply no matter the total coverage, leaving valuable items underinsured.
Scheduled personal property endorsements or separate policies can cover these items fully, often also covering accidental damage not included in standard policies.
8. Auto Insurance: Flooded Cars Aren’t Covered by Liability
Many are surprised to find standard auto liability insurance doesn’t cover hurricane damage to vehicles. Only comprehensive coverage—optional in most states—protects against flooding, fallen trees, and wind damage to vehicles.
Even moderate flooding can result in total losses for cars, leaving you without transportation when you need it most, while you may still owe payments on destroyed vehicles.
Why Gonzalez Insurance Stands Out
- A Complete Approach: Gonzalez Insurance specializes in creating all-encompassing protection plans, bundling home, auto, flood, and business policies to cover you fully. This approach fills gaps and often comes with discounts and simpler claims when multiple policies are involved.
- Local Insight: With decades of serving hurricane-prone communities, we understand regional risks well. We know what vulnerabilities properties face in our area and can recommend specific protections based on your property’s location and features.
- Claims Support: During disasters, our claims advocacy team becomes your advocate, speeding up assessments, advance payments, and resolving complex claims issues. Our clients get priority support when the claims process is most overwhelmed.
Conclusion
With hurricane season approaching, the time to address insurance gaps is now—not when a storm is looming. At Gonzalez Insurance, we provide all the specialized coverages mentioned here, tailored to your specific property and risk profile. Reach out today to schedule a complimentary hurricane coverage review and ensure your financial security stays strong, no matter this hurricane season’s challenges.
FAQs
1. Does my homeowners’ insurance cover flood damage from a hurricane?
No, standard homeowners insurance excludes flood damage. You’ll need a separate flood insurance policy.
2. I own a business. If a hurricane forces me to close, will my insurance cover lost income?
No, standard commercial property insurance doesn’t cover lost income. You need a specific business interruption policy.
3. I live in an area prone to hurricanes; is it worth getting separate hurricane insurance coverage?
Yes, definitely. Standard commercial property insurance often doesn’t cover lost income during closure and recovery after a hurricane.