Hurricane season: Review insurance policies

May 17, 2013

With hurricane season starting June 1, the Property Casualty Insurers Association of America recommends that homeowners, businesses owners and renters do a comprehensive review of their insurance policies and make sure they are covered.

"If you haven't already done so, now is the time to review your insurance policies with an agent to make sure that your home and business, including any personal property items, are adequately protected," said Christopher Hackett, PCI's director, personal lines policy.

"It is important to regularly review policy limits and consider purchasing available optional coverage based on your needs. Homeowners and businesses will need to purchase a separate policy available from the National Flood Insurance Program to cover flood damage. Time spent preparing now will contribute to a quicker recovery after the next weather disaster."

Insurance Suggestions for Hurricane Season

Homeowners can take simple steps to protect their property and assets from becoming casualties of a storm:

1. Review insurance policies to avoid any surprises. The standard homeowners insurance policy does not cover all losses. Based on their circumstances, policyholders may need to purchase endorsements or additional policies. Depending upon where they live, homeowners may need to have the standard homeowners policy, a personal-articles policy, a flood policy, an excess flood coverage policy, and a wind-and-hail policy to ensure their property is adequately covered.

2. Talk with an agent/insurer to make sure the right policies with adequate limits are in place. Policyholders' agents or insurance companies can assist them in determining the type of policies they should have and the correct limits of coverage. The policy should insure the structure for the full replacement cost. The replacement cost is the amount necessary to rebuild the home with construction materials of like kind and quality. Replacement cost should not be confused with market value. In some areas, new building codes will increase the cost of rebuilding. These factors should be considered in the decision regarding how much insurance to buy.

3. Get flood insurance. It is a good idea for people to buy flood insurance. Inland flooding can occur as far as 500 miles from the site of a hurricane. Flooding is not covered in standard homeowners insurance policies. It may be purchased through insurance agents from the National Flood Insurance Program, which is administered by the Federal Emergency Management Administration. There is a 30-day waiting period to get flood insurance, so it is important to act before floodwaters start to rise. Go to for more information.

4. Make sure to know the amount of any deductibles. The deductible is the amount of a covered loss that the homeowner must pay. It may be based on a percentage of the dwelling limit of the home or a fixed dollar amount. In many hurricane-prone areas, insurance deductibles may range from 1 percent to 5 percent of a home’s value. The higher the deductible, the lower the premium will be.

5. Purchase insurance well in advance of a storm. Most insurers will not offer insurance after a hurricane watch or warning has been issued. Generally this moratorium on new coverage will be in effect for 48 hours after the watch or warning has been canceled. The NFIP also has a 30-day waiting period before the policy is effective.

PCI is composed of more than 1,000 member companies, representing the broadest cross-section of insurers of any national trade association. PCI members write more than $190 billion in annual premium, 40 percent of the nation's property casualty insurance.