Millions of people are looking for help in the aftermath of Hurricane Sandy, whether they're figuring out how to cope without electricity or addressing more significant property losses.
As damage reports come in, it's a good time to review your situation. How much coverage you can expect for hurricane-related losses from standard homeowners, renters and automobile policies? Here are seven insurance tips:
1. TAKE A PROPERTY INVENTORY
It's easier to file a damage claim if you know exactly what you own, and can document it. Free online software is available from the Insurance Information Institute to help ease the process, visit www.knowyourstuff.org . The software enables users to upload photos of their belongings as well as receipts for major purchases. Homeowner can also simply write down a list of major property in a notebook, and take photos, noting key information about each item on the back.
2. CHECK COVERAGE TERMS
Read your insurance documents and review the scope of your coverage. Know where to find your policy numbers, and how to file a claim. Call your agent or insurer with any questions. If you don't have hardcopy of your policy, be sure to check it online before the storm hits — you may not have power for a while after the storm.
3. KNOW YOUR POLICY'S HURRICANE DEDUCTIBLE
A standard homeowners policy includes a deductible, meaning the homeowner must pay for a portion of the damages before insurance covers the rest. Typically, that's either $500 or $1,000. However, out-of-pocket expenses for hurricane damages can be much higher. In 18 states on the East and Gulf coasts, insurers are allowed to include hurricane deductibles in homeowners policies. These amounts apply only to hurricane-caused damage, and typically range from 1 percent to 5 percent of the insured value of a home. Deductibles may be higher in some coastal areas. 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 to repair hurricane damage.
The hurricane-prone states that allow insurers to assess hurricane deductibles 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. The District of Columbia is included.
Hurricane deductibles within those states may vary from insurer to insurer. Homeowners who live closer to the coast may also face a higher deductible. Look for the deductible percentage and other details on a "declarations" page, the first page of a homeowners policy. Policies also indicate how severe a hurricane must be before a hurricane deductible applies to a damage claim. Often, the trigger is whether the National Weather Service officially names a tropical storm, as it has in the case of Sandy. Or, a named hurricane may have to reach a specific level of intensity on a scale that runs from a low-level Category 1 to the most severe, Category 5. Sandy's 80 mph winds registered as a Category 1. Some policies set the bar lower before a hurricane deductible can be assessed, such as the issuance of a hurricane watch or warning.
The Insurance Information Institute has posted details about hurricane deductibles at www.tinyurl.com/9f3m2fb .
4. DO YOU NEED FLOOD INSURANCE?
Don't expect flood-related losses from a hurricane to be covered unless you've got flood insurance. Standard homeowners and renters policies cover damage from wind, including hurricane wind damage, and any wind-driven rain entering a home. But damage from water on the ground, or water seeping into a basement from below, isn't covered unless a homeowner has a flood insurance policy. Flood coverage is available from the National Flood Insurance Program and from a few private insurers. The Insurance Information Institute estimates that fewer than one in five homeowners have a flood insurance policy, although four out of five natural disasters involve flooding. Consumers can find out their risk of a flood and the cost of a policy by going to the NFIP's website at: www.floodsmart.gov . There's typically a 30-day waiting period from the purchase date before a flood policy takes effect.
5. WHAT IF YOU DON'T HAVE FLOOD INSURANCE?
Homeowners who live in a federally declared a disaster area may be eligible for federal disaster assistance in the form of grants and loans. Anyone who receives assistance will need to purchase flood insurance as a requirement to the aid. The policy will need to be maintained for the life of the loan. President Barack Obama has signed disaster declarations for New York City, other parts of the metro area and parts of New Jersey, making federal aid available to both states and individual residents.
6. ARE YOU COVERED FOR WATER DAMAGE TO A CAR?
If your car is damaged by flood waters from a hurricane or other disaster, expect to be covered if you've purchased a comprehensive auto insurance policy. About 80 percent of U.S. drivers have comprehensive coverage. If you only have liability coverage, flood damage to a car won't be covered.
7. WHAT HAPPENS WHEN A TREE FALLS?
Standard homeowners policies cover damage to a house from a fallen tree, and tree damage to garages, sheds, fences and outdoor pools. Comprehensive auto insurance will cover damage to a car. It gets trickier when a tree in your yard falls onto a neighbor's property. Generally, the neighbor's homeowners policy will cover those damages. However, you could be liable if your neighbor warned you that the tree was weak before the storm, and you didn't do anything about it.