For some homeowners, the aftermath of Hurricane Sandy could bring a whole second round of troubles. After Sandy passed, homeowners will have to begin the negotiation process with their insurers to get the cash they need to repair wind and water damage.
Homeowners’ insurance companies have gotten more stringent as to what they will pay out as weather has become increasingly more disastrous recently. They’ve raised rates, carved out some coverage, and have implemented new wind and hurricane exclusions and deductibles.
Homeowners should be well aware of the latest approach by insurance companies to mitigate payment and coverage of claims. In order to get your claims paid quickly, thoroughly, should be cognizant of the fact that they need to play the game right if they want to get their claims successfully paid quickly and thoroughly. Here is some vital information in order to get started now, and prepare for later.
If you’ve got your flashlights loaded with fresh batteries and your water bottles in a row, dig out your homeowner’s insurance policy and see what kind of coverage you actually have. Unfortunately, you may be unpleasantly
surprised: After Hurricane Irene hit in August 2011, a number of insurers tucked hefty wind and hurricane deductibles into their policies. They run 2 percent to 5 percent of the insured value of your home, says Charles Hahn, an insurance agent in Little Falls, New Jersey, where, “We’re known for flooding a lot.”
Keep in mind that many insurers have ‘anti-concurrent causation clauses’ in policies now that say if you have damage from multiple causes, say wind and flooding, where wind is covered but flooding is not – they won’t cover anything at all.
A new flood insurance law passed this summer requires insurers to use federal data to allocate the costs in cases where a home is totally destroyed by flooding and wind damage.
Homeowners who live near the shoreline do tend to have federal flood insurance; their mortgage lenders require it. However, Hahn says he saw an uptick in inland purchasers after Irene. Nationally, some 5.65 million
federal flood insurance policies were in place at the end of 2011, which represents a 17 percent increase over the previous year, according to the data from the Insurance Information Institute.
“Even if you don’t have flood insurance, you might have extra protection from water damage if your insurance policy covers failure of your sump pump,” says John Schoon, a property loss consultant at Pride Public Adjusters, Inc., a national adjusting firm that represents the homeowner against the insurance companies. This kind of coverage is generally included in some high-end homeowners’ policies, although other policies may offer limited coverage.
A silver lining does exist however; if the water rises so high in your neighborhood it floods your car, you’re probably covered by your comprehensive auto policy, reports the Insurance Information Institute.
“While you are waiting for the storm to hit in earnest, take your camera phone around your house and inventory all of your belongings,” says Bob Hunter, director of insurance for the Consumer Federation of America.
Even better: video. “You can actually see everything before and after,” Schoon says.
If your home is damaged, document it carefully before you move anything and get images as soon as possible. “When things dry, they can look a lot different,” Schoon says.
Leave the damage as it is until an insurance adjuster arrives on the scene, if possible. However, Sandy is expected to hit a wide swath of the Northeast, so an adjuster may not make it to your home for a few weeks. “It all depends upon how significant the power outages are,”notes Schoon. Keep all damaged items until the adjuster has had a chance to look at them.
“Even if you have flood coverage, you may be disappointed to learn just how little it will cover. You’re protected for structural damage and the cost of replacing basement utilities like electrical panels and heating units,” Hahn says. But all the precious items you have stored downstairs? Not so much. You might very well consider hauling them upstairs now if
you’re worried about a wet basement.
Homeowner Richard Dukas, a public relations executive from Teaneck, New Jersey, could see the floods from Irene coming and preemptively saved all of his possessions from his basement. He had flood coverage and yet, he still
ended up getting only $10,000 back from the insurance on $15,000 worth of damage.
Most homeowners’ policies do cover the cost of food that spoils when the power goes out. But if that’s your only loss, it will be subject to your policy’s deductible of $250, $500 or more. That means that unless you have a large freezer full of meat or priceless truffles, you may not find it worth filing for.
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