flood insurance

Can You Buy Last-Minute Hurricane Insurance?

August 29, 2017 By James Hendrickson 1 Comment

As many as 13 million people in Louisiana and Texas have been impacted by Hurricane Harvey. More than 50 counties have flooded and over 30,000 people have been forced into shelters due to the hurricane’s damage.

What is even more terrifying is that there is a chance many of those people don’t have hurricane insurance. There is an estimated $30 billion worth of damage caused by the storm and only about 40 percent of it will be covered by insurance. Without insurance, they will be forced to foot the bill restoring their home (and possibly rebuilding their home in some cases). So, when is the last possible moment you can buy hurricane insurance?

Can You Buy Last-Minute Hurricane Insurance?

Hurricane insurance may seem like something you don’t really need… until you do. Most people who live in areas regularly hit with hurricanes keep the insurance on their homes year-round. However, if you don’t live in a hurricane-heavy area you may just want to purchase it before the hurricane season.

But if you are wondering whether or not you can wait until the hurricane is in your backyard to purchase insurance, the answer is no. Obviously, you won’t be able to open a policy and cash in after the hurricane either.

“Hurricane insurance” is generally broken down into flood insurance and windstorm insurance, both of which have fairly strict rules as to how long they need to be in effect before cashing in on the policy. For instance, most flood insurance requires at least 30 days of the policy being active before you make any claims. USA Today also reported that most windstorm insurances won’t even open a policy with you if a hurricane is within range.

Do You Need Hurricane Insurance?

So, if you’re not able to buy last-minute hurricane insurance, how do you know if you need it?

As mentioned above, if you live in an area that is regularly hit by hurricanes, get insurance. Most homeowners insurance policies will cover wind damages from a hurricane but the flood damage remains the homeowner’s problem. And, even if you do have “hurricane insurance” roped into your homeowner’s there is a good chance you’ll have to meet a high deductible before your insurance company will pay for it.

If your home is an area that floods regularly, buy additional flood insurance. Many insurance companies will require you to have separate insurance for floods on your home. You are also required, by law, to have flood insurance if you live in areas designated as 100-year flood zones, according to The NY Times. However, many homeowners impacted by Hurricane Harvey were not required to have flood insurance and, therefore, did not.

Keep in mind that there are two different kinds of flood insurance (for the building and for personal property). Most policies will cover up to $250,000 damage to the building (including foundation, paneling, carpet, etc.) and $100,000 in personal property (clothing, beds, couches, furniture, etc.).

Of course, there will always be disasters, like Hurricane Sandy, that could have never been prepared for but the is still time to better prepare yourself, your home and your finances for the next storm.

Shopping for insurance? Check out these other great articles:

Saving Money on Hurricane Insurance

The hurricane season isn’t over until the end of November so if you’re worried about getting your home insured, do it before a storm hits your area! Like most insurances, you’ll want to shop around to get the best deal on hurricane insurance. You can spend anywhere from $300 to $20,000 on a hurricane insurance policy so you’ll want to make sure you’re getting the best coverage at the best price. Here are some helpful tips about hurricane insurance:

Always be sure that the insurance you are purchasing is enough to rebuild your home. As you’ve seen, natural disasters can literally flatten your home. Hurricane insurance (flood and windstorm insurance) can be a lifesaver but only if you’ve insured your home for the correct amount. Chat with your insurance agent so that you can pinpoint the right amount.
Don’t wait. Seriously, if you live in an area impacted by flooding or hurricanes regularly you are playing a game of Russian Roulette. Start looking for hurricane insurance as soon as possible. Also, remember if a hurricane is headed your way, it gives you less leeway with pricing and it could also prevent you from being able to open a policy.
Don’t forget to renew. It is easy to let insurance policies lapse, especially if you haven’t had to use them. Don’t let your hurricane insurance lapse because as soon as it does you’ll have to wait another 30 days until you’re covered again (two hurricanes could happen within that timeframe).

Review Your Policy Now

Essentially, the most important part of having insurance of any kind is to know where you are covered and where you aren’t. Be sure to review your insurance policies and insure that you are covered for what you need. Don’t be afraid to reach out to an agent and chat about your coverage and know for sure you have all the coverage you need.

Want more information? Check out the video below!

Photo: National Geographic Kids

A Cautionary Tale About Legalities, Saving For The Future, and Insurance

June 14, 2011 By Jennifer Derrick 3 Comments

A friend of mine told me a sad story yesterday. Her parents are going to have to move in with her sister who lives in a different state. I assumed that the reason was because the parents had become frail or because they wanted to be nearer to their grandkids. But, no. The reason the parents have to move is much more complex and serves as a warning to the rest of us to make sure our affairs are handled according to the law and that we save something for the future.

My friend’s parents live on land that has been in the family for generations. However, they do not own the piece on which they live. The grandfather owns the land and pays all of the taxes. He has allowed his children and now grandchildren to live on the land rent free. They only have to provide their own home and he pays the taxes. It’s a great deal for the relatives except for one big problem. None of them own the land on which they live. Since the land has never been legally divided and deeded, it’s a precarious position. If the grandfather ever quits paying the taxes, they are all out on the street. Since he is getting older and has made no provision (and doesn’t seem inclined to at this point) to deal with the land, if he dies without a proper estate plan, the relatives will either have to come up with the tax money (which I understand they cannot) or be forced off the land. It’s a mess.

This problem has come home to roost for my friend’s parents. Their home was damaged in a recent flood and, despite repairs, they’ve been unable to eradicate the mold to make it livable again. So they need a new house. But this is where the problem compounds. First, they would be foolish to build a new home on land they don’t own. With the grandfather aging and in poor health, they could build a new home only to be forced off the land next month.

Second, they cannot afford a new home on other land. They have nothing put away for the future and they did not have flood insurance. Without flood insurance, none of their damage is covered. Their only money is their Social Security check which is enough for basic expenses but not for something like this. The only option left is to move in with family, which is less than ideal. The parents are still independent and aren’t going to like living under someone else’s roof. The sister doesn’t really have the space for two more people and the state my friend’s parents have to move to isn’t one in which they want to live.

This mess is a product of some bad luck (the flood), but mostly bad decision making. The failure to save anything for the future means there is no money to draw upon to help them get a new place. The failure to have flood insurance when they lived in a coastal area was another big mistake. Yes, the premiums cost money, but are nothing compared to the damage they’re now dealing with. The fact that they don’t own the land on which they live is the biggest problem. If they owned that land, they could probably scrape together enough money to get a trailer to live in. But since they don’t own the land and know they shouldn’t risk living there any longer they have to buy a house and land elsewhere, which they cannot afford. The only other options are to move in with family or to get a cheap, government subsidized apartment.

This sad situation serves as a reminder to all of us to make sure your dealings are all legal and that you have the proper insurance and safety net to protect your lifestyle. My friend’s parents had a great ride for many years. They lived rent and tax free. Now that the ride has come to an end, they have no plan and no options. They bet that several things could never happen and, as is likely to occur in life, it all happened at once.

When you consider your financial plan, make certain that you’re in control. Don’t live on land you don’t own, even if it’s a great deal for you, unless you are willing to live with the risks. If you do this, make certain you have a plan if the sweet deal ends. Don’t neglect the insurance you should have. It seems silly at times to pay those premiums but when you need it you’ll be darn glad you did. Finally, make sure you save for the future. Hopefully your life will never come to this point, but you never know what’s coming. You need money so you can deal with the unexpected messes in life. Otherwise you may find yourself moving in with family when you’d rather not.

A Life Without Debt: Insurance Helps

July 28, 2009 By Sadie Morris 8 Comments

Many people cut corners on insurance in an effort to save money. They don’t buy policies that they should have, or they are underinsured on the policies they do have. They think that paying a smaller premium is a way to save money and do better financially. Technically, this is a way to save money. But only until you need the insurance and then you learn that all the money you saved on premiums is peanuts compared to the amount that you have to pay out of pocket if you don’t have good insurance.

One of the ways that we have remained out of debt is by not skimping on insurance. It sounds counterproductive. We spend around $5,000 per year on insurance premiums for our home, our cars, umbrella insurance, life insurance, flood insurance, disability insurance, and long term care insurance. This doesn’t count the health insurance through our employers, of which we pay a portion. Our policies are not basic. We’ve bought as much liability as we can afford and we’ve added several options to many of our products to deal with some special cases we have. It’s a lot of money to lay out every year, but without several of these products we would be deeply in debt.

The auto insurance came through in a big way twice: Once on a wreck that wasn’t our fault but was caused by a driver with no insurance (there was massive damage and some injuries), and again when the accident was our fault and there were injuries that had to be paid for. Had we not had insurance or been underinsured, we would be in debt to the tune of over $100,000 right now. But because we paid for the added liability insurance and the protection against an uninsured motorist, our assets were never touched.

The home insurance came through during a hurricane when a tree fell on the house. Not only was there structural damage, but some rare items were also damaged. We’d paid extra for a rider to cover those rare items and were able to get them repaired and restored. Had we not paid extra, they would have been a loss or we would have incurred debt to fix them. The flood insurance also came through that day because water got in the basement and damaged carpet and some other items. Our homeowner’s insurance would not have paid for that, so we would have needed to foot the bill on our own.

We hope to never need the life insurance, disability insurance, or long term care insurance, but as neither of us is getting any younger, we recognize the probabilities that at least one of those policies will probably save our bacon one day. Without them, if one of us dies, becomes disabled, or requires long term care, any and all of our savings could be eaten up trying to replace income or pay for care.

Having insurance that covers all of our needs keeps us out of debt. Yes, we pay a lot per year and we could probably cut back on our policies and save some money. But that would be gambling. Saving $100 per year is nothing if we are ever faced with $100,000 in long term care expenses or sued for a million dollars. That $100 or even $500 per year that we saved wouldn’t even put a dent in those kind of expenses. And we would end up in debt. The kind of debt that is almost impossible to ever pay off. The kind of debt that derails your financial plans forever. That’s just not a risk that we’re willing to take. Insurance has saved us more than once and, while I hope it never has to again, I’m glad that it’s there to keep us out of massive debt.

Water, Water Everywhere! Why You Need Flood Insurance

August 25, 2008 By David G. Mitchell 5 Comments

Mother Nature can give us a lot of free entertainment. There are few things more relaxing than hiking through the woods on a Saturday morning or sitting outside on a Sunday afternoon and watching the sunset. Mother Nature can also wreak havoc on your home and possessions when she decides to dump too much rain or snow or hail on you! Unfortunately, I have found that the damage that Mother Nature can do is often a lot less painful than the hurdles that insurance companies can put us through after Mother Nature has done her worst.

We moved to Florida in 2000. Our house was relatively new at the time, and we thought, in good condition. It had passed inspection easily, and after we moved in, our neighbors cooed about how much effort had gone into making our home “just perfect.” It certainly seemed perfect to us at the time.

However, a few months after we moved in, the rainy season began. First we noticed that we had tremendous flooding on three sides of our house. Every time it rained, we quickly had three inches of standing water in the front of our house and six inches of standing water on either side. Our garden suffered and so did our lawn. More importantly, the flooding made our front door and yard unusable for a substantial part of the Florida rainy season. Fortunately, we were able to correct those problems by installing gutters and drains (to the road) at a cost of a few thousand dollars. Money that we begrudgingly, but necessarily, had to spend. Unfortunately, we only decided to improve the drainage at the front of the house.

We assumed that our water problems were over, but that was not the case. A couple of months after the rainy season had ended, we were rearranging furniture in one of our rooms and discovered, much to our dismay, that an entire wall (concealed behind book cases) had been leaking, apparently for some time. The carpet in the room, baseboard along the wall, and some of the furniture, were all ruined. Also, the wall needed to be repainted. Of course, the leak was at the side of the house where we had elected not to improve our drainage. We knew that if we ever bought a house in Florida again, we would walk the property after a major rain storm to check the drainage.

We called out our insurance adjuster and he promptly appeared. He told us that the exterior walls in the house had not been properly sealed and that because the damage had been caused by flooding, our homeowner’s policy did not protect us from that kind of damage. Since it seemed that the leakage had occurred by groundwater seeping into the walls at the base of the house, we did not challenge the adjuster beyond a few “what if” scenarios. Then we paid another few thousand dollars to repair the damage. We also improved the drainage on both sides of the house and to the rear, at a cost of a few thousand dollars more.

At about the same time that we discovered the leak in our wall, we had yet another major downpour. For reasons that I do not understand, the downpour did not cause me any problems but my next door neighbor felt the full force of what can go wrong in a storm. After several hours of heavy rain, he and his family heard a strange gurgling sound. When they investigated, they found that sewage from the continuing rain had backed up into his home via all of his sinks, bathtubs, and toilets. The clean up was unpleasant, to say the least. He also had to replace flooring in many areas of his home due to damage. As we had found with the damage to our home from ground water, his homeowner’s policy did not cover the damage from the sewage back up.

The convergence of these events lead me to two conclusions. First and foremost, I was clearly not managing our insurance policies in a prudent fashion, so I gladly gave insurance management over to my wife. Second, we needed to review our insurance policies to determine how we could protect ourselves from water damage and related problems. Here is what we learned:

Homeowner’s insurance generally does not cover flood damage

In the months after Hurricane Katrina hit, we all read many stories about people who did not carry flood insurance on their properties. Sadly, many of Katrina’s victims did not live to regret the mistake. Although many residential insurance policies will cover damage from windswept rain, you will probably need a supplemental policy from the National Flood Insurance Program if you want to ensure protection from flood waters. If you live in a flood plain, you must have flood insurance to secure financing on your home (whether to purchase it or to refinance it). For others flood insurance is not required by law.

Flood insurance is not expensive. We pay about $350 per year (a small fraction of what we pay for our homeowner’s policy) but it did give a great deal of security when we experienced Tropical Storm Fay this past week. For more information, you should explore the Federal Emergency Management Agency website (www.fema.gov) and the Federal Citizen Information Center website (http://www.pueblo.gsa.gov/cic_text/housing/natl-flood/insurance.htm).

Don’t wait to explore your needs for a policy

Federal flood policies usually have a 30 day waiting period before they take effect. If you wait until you think you actually need a flood insurance policy, it will probably be too late.

Learn about sewage supplements

When my neighbor’s home was fouled by sewage, his losses could have been mitigated if he had previously purchased a sewage supplement to his homeowner’s policy. Flood insurance policies do not cover damage from sewage.

Don’t assume that natural disasters will not happen to you

Over the years, my homes (whether those I lived in as a child and those I owned as an adult) have been damaged by snow, high winds, hail, rains, flooding, and fires. I have experienced hurricanes, blizzards, tornados, and hail storms. Sometimes damage was significant. Sometimes it was minor, but could have been worse.

The point is that none of us can know when a disaster will strike. When it does strike, you will look first to save your loved ones and you will be grateful if no one is hurt. In the aftermath, however, you will find much needed additional relief if you know that you understand your homeowner’s insurance (and your car insurance, for that matter) so that you will not have to worry about paying thousands to repair or recover your home.

Image courtesy of U.S. Geological Survey