Dispelling the Myths Related to Hurricane Insurance Policies in Florida

Fri May 31st, 2024 on     Homeowners Insurance,    

Hurricanes are a significant concern for homeowners in Florida, and having the right insurance coverage is crucial to safeguarding property and finances. However, there are many misconceptions about hurricane insurance policies that can lead to confusion and inadequate protection. Dispelling these myths can help homeowners make informed decisions and ensure they are properly covered. Below, our Miami insurance coverage lawyer shares some common myths and the facts that debunk them.

Myth 1: Homeowners Insurance Automatically Covers Hurricane Damage

Fact: It is a common misconception that Florida homeowners insurance automatically covers hurricane damage. Though it typically covers wind damage, it may not cover some of the specific damage that hurricanes can cause, such as flooding. 

People with homeowner’s insurance can cover their property in case of wind damage, commonly caused by hurricanes. However, damage from flooding, which is quite often a result of hurricanes, is not covered by insurance. That said, people need to be aware of this and make sure they have both (wind and flood) types of insurance to be fully protected.

Myth 2: Flood Insurance is Unnecessary if You Don’t Live in a High-Risk Zone

Fact: Flooding can happen anywhere in a community, not just in high-risk areas, and nearly 25 percent of flood insurance claims are from home and business owners in low-to-moderate risk areas. 

Hurricanes can produce heavy rainfall and storm surges, which can cause flooding far from traditional at-risk areas. Regardless of how small their flood risk appears to be, everyone should have a flood insurance policy through the National Flood Insurance Program (NFIP).

Myth 3: You Can Wait Until a Hurricane is Approaching to Buy Insurance

Fact: When buying hurricane and flood insurance, there is usually a waiting period before the policy takes effect.

Standard flood insurance policies typically have a 30-day waiting period, and some homeowner’s insurance policies might not start to cover hurricanes until several days after a policy is bought if the purchase takes place right before a storm. To prepare for hurricane season, it’s important to buy and stay covered with sufficient protection long before the storm season arrives. 

Myth 4: The Government Will Fully Compensate for Hurricane Damages

Fact: While federal disaster assistance may be available, it is often limited and intended to be supplementary aid, not a replacement for insurance.

Government aid mainly takes the form of low-interest loans (which ultimately have to be repaid) and grants are nearly always insufficient to defray all of the loss. Homeowners can find themselves with substantial out-of-pocket expenses if they are covered only by federal aid. That said, having thorough insurance coverage provides more financial security.

Myth 5: A New Home Doesn’t Need Insurance Coverage

Fact: Even newly built homes constructed to modern codes can sustain significant damage during a hurricane.

Building codes will make any home slightly more resilient, but they cannot make it totally impenetrable to wind, flying debris, and flooding. Any building will be damaged by significant winds, debris, and flooding, and insurance allows any homeowner to recover financially from such incidents.

Myth 6: All Hurricane Policies Are the Same

Fact: Hurricane insurance policies can vary significantly in terms of coverage, exclusions, deductibles, and premiums.

It’s essential to review and compare policies carefully. Key aspects to consider include coverage limits for different types of damage, specific exclusions (such as those for certain types of water damage), and the deductible structure. Some policies have separate windstorm and hurricane deductibles that are typically higher than the standard deductible.

Myth 7: My Homeowner Association’s Insurance Covers My Property

Fact: Your insurance policy, as provided by a homeowner’s association, covers common areas and the exterior of your property — not the interior items or your personal property.

Each homeowner also needs their own policy for the building’s interior and contents, as well as any improvements made. It’s important to know what’s covered by the association’s policy — and to make sure personal policies pick up where that coverage left off.

Myth 8: Insurance Will Cover the Full Cost of Repairs and Replacement

Fact: You would think that if you have homeowner’s insurance, any damage to your house caused by a natural disaster would be paid for in full. However, you would be wrong. This is because your policy might not offer enough coverage to replace the damaged parts of your house, or the contract might exclude certain damages (i.e., flooding). It might also specify that you need to pay a portion of the cost yourself, commonly referred to as a deductible.

Coverage limits are limits on the coverages for property and liability that an insurer will pay on a claim (the covered maximum) and, in most cases, do not cover the full replacement cost. Policies also have exclusions for excluded perils and often deductibles that the homeowner must meet before coverage will respond. To increase protection, insurance professionals should try to cover all concerns with any type of insurance policy. One way to add coverage for additional excluded perils is by an endorsement or rider.

Myth 9: Filing a Claim Will Automatically Lead to a Rate Increase

Fact: Making a claim does not always drive up insurance premiums. A variety of factors can influence rate changes, including an insurance company’s approach to such matters, the severity of the claims, and their frequency. 

Some insurers may raise rates after a claim, but others may not, especially if the claim is for a first-time incident. It’s important to discuss the potential impact of claims on premiums with your insurer and consider the long-term benefits of filing a claim versus covering minor repairs out of pocket.

Myth 10: You Can’t Make Any Repairs Until the Insurance Adjuster Arrives

Fact: Homeowners can and should perform just enough work to stop the damage from getting worse until the insurance adjuster arrives.

Insurers expect homeowners to take reasonable steps to mitigate further damage. Document the damage thoroughly with photos and receipts before making temporary repairs. This documentation will support your claim and ensure you are reimbursed for the costs of these initial repairs.

Contact a Miami Insurance Coverage Lawyer as Soon as Possible

By debunking these myths about hurricane insurance, homeowners in Florida (and any state that hurricanes hit) can be sure they have the proper coverage and understand the process of making claims. Good preparation to protect your home and finances requires your review of policy details, the ability to secure flood insurance and filing for coverage well in advance of the hurricane season. Seek legal guidance from a skilled Miami insurance coverage lawyer as soon as possible after you’ve been impacted by a hurricane.

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