The Right Insurance for Severe Weather
Well, hurricane season is now a reality. In fact, severe weather season is upon us in many parts of North America. "Tornado Alley" has already experienced a number of damaging twisters as well. Which brings me to the topic at hand: do you have the right insurance?
Here's the rub: insurers have made getting the right insurance a complex matter. For instance, even if you have hurricane insurance, you aren't necessarily covered in case of flood. In fact, there are people in the New Orleans area hit by Katrina last year who won't see a penny of their insurance claim. Why? Because they had hurricane insurance, but their homes were actually destroyed by the flood when the levies broke. For that matter, if you have hurricane insurance and you actually suffer damage because of a severe thunderstorm ("thrown off" by the hurricane, but a separate weather event), you could still be without coverage, depending on your homeowners policy.
While both you and I would say this is a bogus way for an insurance company to get out of paying a claim (and I'd agree), the fact of the matter is that insurers have made these kinds of coverages into separate products. Virtually every homeowners policy will be subject to similar exclusions for severe weather, and the kinds of endorsements or riders that we put on our policy can make all the difference. We consumers need to be aware of that and make sure we have the right coverage for us.
Now, insurers are not just making these kinds of coverage separate as a money grab. (Although I must admit: insurers do seem to have a license to print money.) However, the risks associated with different kinds of coverage are different -- and each type of coverage will be separately assessed in your case. This can work in your favor -- especially if your risk of flood is low while your risk of hurricane is high. You aren't paying for high risk across the board.
Other things to be aware of include the fact that wind damage is also often separate from hurricane insurance! So, you could also find yourself paying for your own damage if the damage was caused by wind, but not "technically" by hurricane.
Read, read, read your policy! While it may seem as if insurers are deliberately sneaky, the truth is that we all need to be paying attention to the fine print in our policies. We need to be sure that we've purchased the protection that we think we need. If you ever have to make a claim, the last thing you need is to be told that you didn't have the right insurance to cover your damage.