With
the devastation of Hurricane Harvey and Hurricane Irma we thought it was a good
idea to review steps that you should take to protect yourself and if necessary
recover faster from a disaster.
During a disaster, liquidity is king. It
is a good idea to have a few thousand dollars in cash on hand and to make sure
that you have extra money in your checking account as well. This way, if you can't
get access to your bank for a while, you can buy supplies and if possible pay
bills.
It is important to understand homeowner’s insurance. Most
homeowner’s policies have a separate hurricane deductible. A standard homeowner's insurance policy deductible is
typically $500 or $1,000. Hurricane deductibles are calculated as a percentage of the insured
value of the house. That percentage, along with details about a policy's
hurricane deductible, usually appears on the declaration page. States that let
insurers tack hurricane deductibles onto homeowner's policies are Alabama,
Connecticut, Delaware, Florida, Georgia, Hawaii, Louisiana, Maine, Maryland,
Massachusetts, Mississippi, New Jersey, New York, North Carolina, Rhode Island,
South Carolina, Texas, Virginia as well as the District of Columbia. Hurricane deductibles apply only to
damage caused by hurricanes, and typically range from 1 % to 5 % of the insured
value of a house, according to the Insurance Information Institute. For
example, a policyholder whose house is insured for $200,000 with a 2 %
hurricane deductible would have to pay the first $4,000 needed to repair the
home if a hurricane caused the damage.
Damage caused by flooding is generally not covered by a standard
homeowner’s insurance policy. A flood
typically involves external water rising onto the land from an overflowing
river, hurricane, tsunami, mudslide or even heavy rains. You may want to
consider buying flood insurance. Many people are surprised by the limitations
to these policies. For example, they do not cover damage to contents stored in
basements. If you buy this coverage, learn about all of the exclusions so you
can plan accordingly.
One
of the byproducts of water damage is mold and mildew. Besides being potentially hazardous for your health, mold can reduce the
value of the house by discoloring the walls and/or ceilings, rotting wood or
ductwork, and creating a foul odor. Most basic homeowner’s
insurance policies exclude coverage due to damage caused by mold, fungi, and
bacteria.
Many homeowners may
not realize that they are responsible for the maintenance and repair of the
pipeline between the city sewer main,
usually located in the street, and their house. Sewage backup coverage is
available from most insurers as a rider to a homeowner’s insurance
policy. It costs very little and should be obtained if your home is connected
to a sewer.
Most automobile insurance policies do cover flooding. Most
standard automobile policies with collision and comprehensive coverage replace
flood damaged cars after the deductible.
It is important to
store financial documents such as deeds, title insurance, auto ownership
documents, insurance policies and estate planning documents remotely.
Photos and/or videos should be made of the contents of
the house and stored electronically. This way, when
it comes time to submitting a claim to the insurance company, there will be an
accurate record and proof of what was damaged or lost.
Periodically review life insurance and disability
policies. Confirm the beneficiaries.
Check the title to the house. This
is a required part of the application process for a mortgage and it is protection
in the event of a claim. Without
an accurate title it is difficult to prove ownership or eligibility to submit a
claim for insurance benefits or government assistance.
By
following these steps, you will be in a better position to weather the storm.
If you have additional
questions, please feel free to call my office at 201-843-0044 or check out our
website at:
