The National Oceanic and Atmospheric Administration (NOAA) is predicting a 60% chance of an “above-normal” Atlantic hurricane season this year, which runs from June 1 to November 30. The agency forecasts 13 to 19 named storms, including three to five major hurricanes of Category 3 or higher.
Experts are urging homeowners to review their insurance policies now to ensure they have adequate coverage. “You should pay close attention to your insurance policies,” says Charles Nyce, a risk management and insurance professor at Florida State University. “Besides being ready physically by having your radio, your batteries, your water … you should pay close attention to your insurance policies.”
Three Key Things to Consider
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Review Your Policy Limits Most insurance companies calculate policy limits based on your home’s size and local construction costs. For example, a 2,000 square foot home in an area with $250 per square foot construction costs would need a $500,000 policy limit. However, rising building costs and home renovations can leave you underinsured if your coverage isn’t updated.
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Check Your Deductibles Your deductible is what you’ll pay out of pocket if you file a claim. While higher deductibles can lower premiums, they also mean more upfront costs when disaster strikes. For hurricane damage, wind deductibles – often a percentage of your policy value – can be particularly significant. For instance, a 2% deductible on a $500,000 house could mean $10,000 in out-of-pocket costs.
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Assess Your Flood Insurance Needs Standard homeowners insurance typically doesn’t cover flood damage. The National Flood Insurance Program (NFIP) offers separate flood insurance policies, but there’s usually a 30-day waiting period before they take effect. Flood insurance can be crucial even if you don’t live in a flood-prone area – flooding causes 90% of disaster damage in the U.S. each year.
Experts emphasize that acting now is crucial. Insurers often suspend policy changes and new policies when a storm is imminent, so reviewing your coverage now ensures you’re protected before it’s too late. “It’s really important to review your policy at least annually, and this is a good time to do it,” says Bob Passmore of the American Property Casualty Insurance Association.
Key statistics to keep in mind:
- 60% chance of “above-normal” hurricane activity
- 13-19 named storms predicted
- 3-5 major hurricanes expected
- 90% of disaster damage in the U.S. is caused by flooding
- 30-day waiting period for NFIP policies
By reviewing your policy limits, understanding your deductibles, and considering flood insurance, you can better prepare for the potential financial impact of hurricane season.
